Unlike many tutors who advocate reading books about the 'great and successful' traders and the tales that they tell about making vast sums of money (which may or may not be embellished), I prefer to suggest books which to us present a more balanced and possibly realistic side of the business.

While I am sure that other tutors want potential clients to believe that most traders out there are making vast profits and we just need to find out what they are doing, the truth really is that a majority of individuals lose money trading or investing and I believe we can learn as much by understanding where traders go wrong.

So my suggested reading will probably be different from most.

"A Bull’s Eye Investing" by John Mauldin

John Mauldin confirms his status as one of the most knowledgeable and well respected writers in the business with this excellent book. A must read for all particularly long term investors and those managing their own Pension Funds.

"The Great Crash 1929" by John Kenneth Galbraith

A must read book as it details the build up to and results of the Wall Street Crash of 1929. What may surprise many readers is the similarity of the markets of the 1920s and the 1990s.

"Fooled by Randomness – The Hidden Role of Chance in the Markets and in Life" by Nassim Nicholas Taleb.

Taleb, an options trader, uses mathematics, history, philosophy and recollections from his trading career to illustrate how it is important to realize how chance can play an important role in trading and the importance of understanding chance, probability and risk when trading.

"When Genius Failed- The Rise and Fall of Long Term Capital Management" by Roger Lowenstein

An interesting insight into how some of the brightest minds in the business including Nobel Prize winners lost so much money that at one point the US Financial System was threatened with being destabilized. Basically these guys had developed trading strategies which, through back testing, they believed gave them a very high probability of success. They were right but what they didn’t realize was that when these strategies failed the losses would be enormous. (This type of trading scenario in fact is one of the ones that Taleb discusses in his book).

"Reminiscences of a Stock Operator" by Edwin Lefevre and "Jesse Livermore- The World's Greatest Stock Trader" by Richard Smitten.

Both books cover the life and trading career of Jesse Livermore who traded Stocks and commodities in the first half of the last century. I suggest them not because I think that he was the World’s Greatest Trader, he had some excellent rules and techniques but he often had problems keeping to them which led to him losing his capital on a few occasions. Rather I think readers will be surprised at how similar the markets were to today even in the early 1900s. There were speculators and day-trading rooms just as now. Both books therefore give fascinating insights into the trading conditions of the period.