I’ve been asked many (many) times which books I recommend for aspiring traders (either for day trading or swing trading ). So here’s the list of the best trading books I can recommend.

Remember, this is not in place of a lot of hard work, no book, even the best one, will hand you a complete trading system or edge that you can just start applying tomorrow. You still need to learn how too apply theoretical trading advice in real life in your chosen market. This can be done either by learning from a mentor as I’ve done in the past with a few who contacted me or through repeated practice and careful and meticulous market and self observation. So the following list are good sources of starting points but your journey as a trader will just begin.

Day Trading Methods Books

Trade Your Way to Financial Freedom 

One of the most useful books for day traders. Covers the all-important position sizing, risk management,biases we have as traders, some basic trading methods and other useful information. A must read.

Techniques of Tape Reading Street Smarts: High Probability Short-Term Trading Strategies
 
This books covers the personal story of the author in his development as a trader, once you get past that there are many day trades examples, charts and strategies you can use to build on and develop your own style.

Tools and Tactics for the Master DayTrader: Battle-Tested Techniques for Day, Swing, and Position Traders 

Although this book is quite old it is still in my opinion one of the useful ones to have. Not for the speficis techniques but for the mindset and setting the scene on how to think like a trader.

Trading Psychology Books

Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude 

Another must read book, good trading requires very high dose of mental discipline, even with the best trading rules in the world, if you don’t follow your plan, keep the demons at bay and remain focused through then you won’t succeed. Highly recommended.

Trading to Win: The Psychology of Mastering the Markets 

Ari Kiev worked for many years with many traders and you can see this in the writing, many important aspects of traders behaviour, mindset and approach to trading are covered here.

Enhancing Trader Performance: Proven Strategies From the Cutting Edge of Trading Psychology

A fantastic book Dr. Brett, it takes some experience to really fully appreciate the material in here but still I would recommend it to both beginning and intermediate traders.

Trading Systems Development Books

The Encyclopedia of Trading Strategies

The description is pretty self explanatory, a good desk reference for various strategies. Of course you can’t expect to just copy one of the methods here and make money immediately. It’s all about how you tweak, adapt and make the trading rules your own.

Trading Systems That Work: Building and Evaluating Effective Trading Systems

A very good book on how to evaluate your trading results and use them to further improve your edge and squeeze more profits out of the same trading ideas.

Encyclopedia of Chart Patterns

Another good reference book that covers chart patterns, from my experience many of these work across timeframes, the art of reading charts is a crucial one for traders. Recognizing patters, understanding what the probablities are for future price action, including when the pattern works and doesn’t is of the highest importance.

That’s it, this is my answer to those looking for trading books to learn from as a begginer or even for intermediate traders looking to up their game and improve their profitability. If you have any questions or looking for reading material on a specific topic feel free to drop me an email (see sidebar for contact details) and I’ll try to answer the best I can.

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While looking up and reading more about exits I came across the following article on Hard Right Edge, Alan Farley’s website. I usually enjoy reading his setups and analysis articles and think there’s a lot of good material posted there so this one on exits was quite intriguing, and this caught my eye:

Take the time to examine support and resistance, and then guess where the crowd will take action. Over time you’ll become an expert in picking market turning points. Start by asking yourself this common-sense question: Where will other traders get too scared or greedy, and want to jump ship?

From Mastering the art of the exit.

What jumped out to me immediately was picking market turning points. This seems to be in contrast to conventional thought that it’s futile to predict tops and bottoms and it’s better to go with trends, ride them and let the market take you out. On the other hand, I’ve seen many times how good positions I was holding with a nice profit cushion turned into either break even trades or losers. My personal conclusion to this predicament is that the exit method one chooses would depend on the particular strategy being employed and also on personal trading style. Determining what works for you in your trading is probably more important than just following one rule of thumb or another. I also find it imortant to remind myself that no matter how well I devise my strategy this is not a game of a single right and wrong answers that works every single time. As the article title implies, exits are more of an art and I would add, also guesswork and (horror!) luck.

Tags: action, alan farley, analysis articles, common sense, conclusion, crowd, guesswork, HARD RIGHT EDGE, hardrightedge, market turning points, personal trading, resistance, rule of thumb, support, swing trading, tops and bottoms, trades, trading