100 Books Like The Way of the Warrior Trader

Trading is a mental sport.

I have been teaching and mentoring traders since 1999. In that time I have seen over and over again that success comes from the ability to maintain discipline and withstand emotional discomfort.

Everybody wants to buy a system or strategy “that just works”. Well, as somebody who has developed many great strategies I can tell you this harsh truth… The best system in the world is worthless if you can’t follow its rules.

This is the core reason why over 90% of traders fail, lose money, and quit in disgust.

This book is one of the best I have found on the subject of trading discipline and mindset. If you are at all serious about your success in the market…start here!

The markets are always changing. My ability to maintain performance for over 25+ years I believe comes from my deep foundation in the universal principles that drive market prices.

This book was pivotal in my understanding that some things never change. It is a bit difficult to get through, since it was written in the early 1900s. I think the strangeness of the language forced me to really think through and understand the lessons the book teaches.

In my experience, mental strengthening is step #1. 

Then you need to learn the art of behavioral analysis and economic psychology if you want to be able to consistently understand why markets move so you can begin to forecast those movements…

This book is a great place to get that process started.

Most traders think of the book Technical Analysis Of Stock Trends as the bible of chart reading. I think Alan Farley has surpassed them in this book.  

Alan is a great trader, and you can tell he has executed thousands of trades by how he wrote this book.  

Thick and richly dense with tons of easy-to-understand patterns and styles of analysis, this book will give you all the visual tools and patterns you need to analyze any market. It contains what you need to turn a chart from an incomprehensible bunch of squiggles into a story about the wants, needs, wishes, fears, and hopes of the other market participants. It belongs easily within reach on any serious trader’s bookshelf.

Another trader who writes about the reality of trading for a living, Dr. Elder has really laid out many of the critical fundamentals of a successful trading operation in this book.  

Engaging and easy to read, this book will likely shock you with its simplicity, focus on planning, and conservative “grinding” for cash-flowing the markets.

Trading has this sexy image of well-dressed men screaming into phones, before they head out to their yachts. In reality it is supremely boring and the best traders I know live lives of complete freedom… Often totally unrecognized by their neighbors. 

This book gives you a real insight into the day-to-day operations of a career trader and it’s an important perspective shift for anybody wanting to make trading a significant aspect of their life.

While writing my book, I learned about investment opportunities that I had never heard about before, even though I had decades of experience as an investor and had a series of financial advisors.

A great example is the Self-Directed IRA, a type of retirement account rarely discussed even though it is enormously powerful. While most retirement accounts and 401(k)s offer a small set of bond and stock market funds you can invest in, SDIRAs allow you to invest in almost anything as long as you follow the rules.

This book does a great job of explaining SDIRAs and Solo 401(k)s, how they work, and how you can set one up with some of your retirement assets. 

I first encountered Gary Antonacci’s strategy in his paper “Risk Premia Harvesting Through Dual Momentum,” in which he called momentum “the premier market anomaly.” He found that combining absolute and relative momentum delivered optimal results. In this book, he shows how to boost performance with monthly switching among three asset classes in the following decision tree: Did the S&P 500 beat US bonds over the past 12 months? If no, own US bonds. If yes, did the S&P 500 beat global stocks over the past 12 months? If no, own global stocks. If yes, own the S&P 500. Just three funds could power this system: SPY (S&P 500), AGG (US bonds), VEU (global stocks ex US).

Some people love to make successful investing seem more complicated than it really is. In this anthology of essays and letters written between 2010–20, Terry Smith makes the case for simply buying the best companies in the world. These are businesses that generate large amounts of cash and know what to do with it in the form of sound capital allocation. The result is a powerful compounding of returns for the long term.

This book serves as a good reiteration of the thinking and principles underpinning Smith’s investing approach, including his three-step investment mantra: “Buy good companies. Don’t overpay. Do nothing.” It also highlights the nuances of the process, including why Smith favors return on capital employed (ROCE) and free cash flow (FCF) yield as metrics for assessing companies and why Smith is less enamored of measures such as earnings per share (EPS).

Practicing good behavior is the most important ingredient of successful investing.

And understanding the ingrained biases and heuristics that negatively impact our behavior is essential to good investment behavior.

I’ve read dozens of books on behavioral biases, and I think this book is among the best and a perfect introduction to the topic. Written in a light and humorous manner, Montier explains common cognitive biases, how they lead to irrational investment decisions, strategies for overcoming them, and how to practice better investment behavior.

I’d known – from some of my early Wall Street Journal work – that Soros was a philosophy student in London before he embarked on the Wall Street pursuits that made him a billionaire. This operates on a higher mental plane than 99% of what’s written about Wall Street. It’s packed with philosophical riffs that are not easy to crack. And yet, it’s a sincere effort by Soros to explain his vast, enduring hedge-fund success. You have to be in the right mood to accept his challenge. If so, I found it made for an excellent series of evening quests as I worked through the text, slowly turning bewilderment into insights.

Warren Buffett, considered the greatest investor of all time, manages a portfolio worth hundreds of billions of dollars.

However, Swedroe's teachings show that his core investment strategies can be replicated by any investor. In his book, Swedroe offers insights into Buffett's philosophy and practical guidance on building a diversified portfolio, managing risk, and making sound investment decisions.

The book is written in a clear and concise manner, with complex topics simplified, making it a great recommendation for novice investors.