Books can be invaluable for *any* level of trader. Whether it’s a biography book, a “getting started” book, a book on technical analysis, or one about psychology. The amount of knowledge packed within the covers can save you *time* and is arguably one of the best ROIs for traders.
But make no mistake, no book will make you a good trader. It’s up to you to be able to absorb and apply the principles taught. Successful trading involves a composition of different skills applied in a way that is almost *always* unique to the individual.
Day trading is a career, similar in rigor to being a Lawyer or Engineer. Be wary of books promising too much. Do your research on the author. Many prominent, highly successful traders write books. If you can’t find a credible source of their reputation (that is not their own website), be extremely wary of their credibility. Many trading books are written as a marketing funnel for their paid courses/mentorship.
Below you’ll find a categorized list of popular books that are consistently recommended by traders.
Important note:
While Kindles are great, it’s very hard to read a trading book with charts and images on a Kindle (as they are often shown on a separate “page”). It’s highly recommended to buy the physical book because it’s easier to understand what the author is talking about when you can reference the image/chart at the same time.
Books for Beginners
Make no mistake that this book is a marketing funnel for Andrew’s website and will NOT teach you how to day trade for a living – it will simply teach you about day trading. However, it’s still one of the best books for ABSOLUTE beginners who know nothing about day trading. It breaks down all the fundamental concepts from brokers and software to strategies and risk management. It’s all the very basic and fundamental information you need to know to even get a foot in the door or understand what others might be talking about in a conversation online. As the book breaks down all major concepts to an easy comprehension level, the side-effect of that is that it makes it look easy – when it’s not. It’s really not. Recommended for absolute beginners. You can also view his newer book entitled “Advanced Techniques in Day Trading: A Practical Guide to High Probability Strategies and Methods” here.
Mike Bellafiore is the co-founder of SMB Capital, a proprietary trading firm, and is a professional trading coach. While the book can sometimes lean towards being an advertisement for his prop firm, there is still so much value to take from this book. The Playbook gives an inside look into a professional trader’s thought process, methodologies, routines, and journaling techniques. The book is about how professional traders work, how they look for their trades, how they take and exit trades, and how you can improve your processes. It gives perspective on who you are up against as a new trader, and why taking trading seriously, through work ethic and attitude, is required in order to be a successful trader. Recommended for all traders.
It’s a bit older of a book, so it’s dated for some of the technology we have today, but it’s a great introduction to chart analysis. Has a combination of great explanations and illustrations, while also teaching critical thinking and developing a trading style that fits your own personality. It’s very accessible but probably beneficial to have a very basic understanding of trading before picking up this book. Recommended for beginners.
Books about Psychology
Arguably the most popular book on trading psychology. While some consider the advice to be a bit trite, it’s all true and explains why most traders fail and how to trade in the market with confidence and discipline. The author definitely repeats himself a lot, but that’s probably purposeful, successfully applying these principles takes a repetitive approach. Best for beginner traders.
Something of a Magnum Opus for Steenbarger, this book synthesizes much of what the author has written about in all of his previous books. It reads like a large compilation of anecdotes and case studies from the author’s experience as a trading psychologist/consultant, with reflections on the wisdom and lessons from each case. All of these individual pieces slowly come together by the end of the book to synthesize the author’s main idea of a map to improve your trading. While the author may have missed the mark in clearly explaining his main idea of “Best Practices to Best Processes”, it’s close enough that any trader should be able to glean some insight from this book. Though the subject matter is not particularly specific and at times the book may seem not relevant to the individual reader, virtually any developed trader can find valuable pieces of wisdom to improve their practice. Best for intermediate to advanced traders. You can also get his original book here.
This book is a must read for short-term traders, especially intraday. It delves deep into the cognitive functions that guide our decision making in all spectrums of life. It may sound weird, but it teaches you how to think better; to be more self-aware and self-critical. He offers practical insights into how choices are made and how we can use different techniques to guard against the mental glitches that often get us into trouble. Necessary reading for success in any field, especially trading. Best for all traders.
A bit repetitive, but by the end, the few ideas and points it puts forward are very useful. Like how important exits are in a trading strategy, and position sizing – a good view on psychology as well. He explains much about what gets in the way of you being successful regardless of your strategy. Best for beginner to intermediate traders.
Books about Technical Trading
What do Charles Dow, Jesse Livermore, and Richard Ney have in common? They used volume and price to anticipate where the market was heading next, and so built their vast fortunes. This book will not teach you how to perfectly read the markets, but it’s another great tool to have in the trading toolbelt. The book helps give insight into candles, why they behave the way they do and what they might be indicating. It also teaches you about the concepts of accumulation and distribution phases. Good for beginner traders.
The bible of candlestick charts and patterns, with a little background on its origins from the Japanese rice market. It’s another tool in the toolbox type of book, as trading candlestick patterns isn’t enough to be successful in trading, but it’s a detailed dive into the subject. Recommended for beginner traders.
Very text heavy to its detriment (it could use chart examples), but it’s very detailed and a good insight into how to read and understand price action. It teaches you to rely on statistics and find a system that works for you and stick with it. Recommended for intermediate to advanced traders.
This book is an examination of Market Profile charting concepts. It’s definitely worth the read for anyone wanting to expand their knowledge beyond patterns and price action. It teaches how to read the markets’ action through time and assist in confirming direction. Want to have a better sense and understanding of the direction the market might move at the open? This book can help with that. Recommended for advanced traders.
One of the more prominent books on proper contemporary technical analysis. This book digs deep into properly using statistics, data, and patterns in the market to apply a more rigorous and consistent approach for research-based trading. Rich with technical information and applicable research ideas. Recommended for all traders.
Stories, Interviews, and Biographies
Considered a classic in the contemporary American asset trading sphere, this semi-fictitious book documents the goings on of Jesse Livermore, a man who, in the early 1900’s, went through multiple cycles of extreme success and bankrupt failure. This book is an ode to the spirit and origins of asset speculation in the United States. Recommended for all traders.
The Market Wizards books are a must read by anyone sincerely interested in pursuing asset trading for a career. They are composed of dozens of comprehensive interviews with the most successful traders and hedge fund/risk managers. He does a great job at asking questions and having the guests explain their strategies. It does not matter if you are trading stocks, commodities, or bitcoin; if you trade intraday, or swing trading; or if you trade fundamentals, or technicals. The knowledge and wisdom within them are indispensable. It shows that money can be made in a variety of ways by a variety of people. Recommended for all traders.
A history of the famed Jim Simons, one of the greatest money makers in history, and Renaissance’s Medallion fund. It’s about how quantitative investing developed over the last 40 years as a result of increased use of mathematical formulas and large data sets. Recommended for all traders.
A nice, quick story about a unique success story in the markets. Not technically rich, but full of wisdom and insight into a successful trader’s journey from first introduction to markets, to catastrophic failure, depression, elation, to eventual, and almost unbelievable, success. Recommended for all traders.
Books about Market Comprehension
Macro-oriented, this book concerns economics research conducted by the author. It discusses the irrational nature of markets and behavioral functions in the market. It provides insight on the question of “are markets efficient?”, “how much so?”, and “how one can detect periods of irrationality?”. Not explicitly a trading book, but very useful broad knowledge for anyone who works in markets. Recommended for all traders.
An excellent book that provides a great deal of insight into the patterns of the market. It is very technically written and goes over large quantities of specific data regarding seasonal patterns. There could be a bit more statistical rigor, but otherwise the information is all very helpful. Seasonality is a very interesting and underappreciated subject in the retail space. Fundamentally based cycles can provide a useful filter for broader market conditions, which can enhance the edge of a shorter-term trading strategy. Recommended for intermediate to advanced traders.
Very good information on how big, diversified futures hedge funds operate. Even though these firms employ top PhDs in their research teams, it’s possible to replicate their trading with more simplistic models. A must read if you’re ever thinking about starting your own fund. Best for advanced traders.