Trading books are a great way to get foundational knowledge about the stock market, and also build on what you already know about trading. Don’t make the mistake of entering the stock market without getting an education. A $20 investment in a book could save and make you thousands over the course of your lifetime. Here are 5 trading books every trader needs to read this year to take their trading to the next level:
Trade Your Way To Financial Freedom
Van K. Tharp
This is one of the best books for system development. This book focuses on how to create and develop a trading system that is suited to your personality and lifestyle. The book includes a 17-step model for building a trading system. You’d be surprised how many traders now are trading with real money and have absolutely no defined trading system. It is also a great read to improve existing systems. This is useful for new traders because you have to create a defined trading system in place before you start trading in the markets with real capital.
Reminiscences of a Stock Operator
This is a great book even if you aren’t a trader yet. This book is a biography of one of the most famous and successful traders of all time: The legendary Jesse Livermore. Jesse Livermore was one of the first active traders in history. He traded and made a fortune during the Great Depression, and the book has a ton of lessons that apply to today’s markets, despite trading in a market almost a century ago.
One of my favorite quotes from the book: “A man must know himself thoroughly if he is going to make a good job out of trading in the speculative markets. To know what I was capable of in the line of folly was a long educational step. I sometimes think that no price is too high for a speculator to pay to learn that which will keep him from getting the swelled head.”
The Market Wizards
The Market Wizards series is a must-read for traders of all experience levels. There is no other series where you can find dozens of interviews with some of the most successful traders of all time, all in one place. There are many editions of the Market Wizards, and they are all amazing. Jack Schwager helps find the answer to the question every aspiring trader has: What separates the top traders from the losing traders? The legends he interviews include Paul Tudor Jones, Marty Schwartz, Bruce Kovner, and many more.
Trading in the Zone
One of the best trading psychology books in the world. This book is considered by many to be the “bible” of trading psychology. Douglas gets to the root of every psychological issue traders of all experience levels encounter. He reminds us that we were not programmed to profitable traders, and it takes great self-awareness to become consistent.
The mistakes we make are bad habits of applying deep-rooted emotional issues to our interactions with the financial markets. This book guides you on how to trade without letting psychological and emotional baggage influence your trading decisions. Overcoming these deep-rooted issues in yourself will allow you to see the market objectively, and make optimal decisions.
Daily Trading Coach
Dr. Brett Steenbarger
Dr. Brett Steenbarger is one of the best trading coaches in the world. He has coached dozens of world-class traders, and has seen every possible type of trading mistake you can make. This book has something of value for traders of all experience levels. New traders will quickly realize that profitable trading really comes from mastering your own psychology. We are own worst enemy when it comes to trading success, and Dr. Steenbarger breaks down in this book all the different ways we get in our own way, and what you can do to overcome them. This book offers a ton of great tips on how to achieve peak performance in your trading as well.