Trading Psychology Books Every Trader Should Read!

  • May 24, 2024
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Trading Psychology Books Every Trader Should Read!

Whether you are a beginner or seasoned trader, trading psychology books can equip you with the practical strategies for succeeding. If you want to thrive in your online trading career technical analysis and market knowledge are indispensable. But you absolutely need to develop disciple, properly manage your emotions in order to weather volatile markets. 

In this article we present to you the best trading psychology books, written by successful traders and market wizards who share their know-how and experience. All traders developing winning attitudes should read at least some of these books.

Besides trading strategies, all the best trading books cover psychological aspects of trading. So, if you want to start your first trading or enhance trading performances, these books are a must for you!

Best books on trading psychology

Psychology of Great Traders by Thami Kabbaj

This book is intended for all levels of traders, it focuses more specifically on short-term trading techniques. Ideal for those looking to learn how to develop strategies, make decisions and trade, and manage risk.

He shares Thami Kabbaj’s personal view on the psychological, economic and technical factors that determine trading success.

It provides valuable insights into the various trading methods and tools, which are essential for creating intricate trading strategies and plans.

Trading in the zone by mark douglas

The book Traders Enter the Zone by Mark Douglas is the first in our top 5 best trading books. This book covers the fundamental principles of technical and fundamental analysis, with a strong emphasis on the significance of emotional regulation. 

It is relevant for traders of all backgrounds, as it delves into the basics of trading and market dynamics. Success in trading is dependent on implementing well-defined strategies and risk management practices. Mark Douglas provides straightforward guidance on utilizing one’s mindset to make informed and reliable decisions consistently.

Psychology of Great Traders by Thami Kabbaj

“Psychology of Great Traders” is considered the essential book for understanding the psychological functioning of traders. Novices can learn how to manage their emotions and experienced traders can improve their discipline. 

Written by Thami Kabbaj, an independent trader and stock market educator, this book delves into strategies for traders to navigate psychological pitfalls in the market and develop a mindset conducive to achieving financial objectives. 

Readers are guided on managing stress, avoiding impulsive decisions, and leveraging the experiences of fellow traders. Key topics explored include emotional intelligence, risk management, self-assurance, and technical analysis. The author provides insights on how traders can maintain composure, make informed choices, and learn from past successes and failures.

The psychology of trading by Charles G. Koonitz 

Trading brings its share of emotions, which considerably harms performance. Think about the pressure on the trader who must find the right stocks, trigger trades at the right time and analyze various sources of information. This brings its share of daily stress. Optimism, despair and panic are emotions that a trader can experience in less than five minutes.

Trading psychology refers to the study of behavior and the management of trader emotions. It is the analysis of the trader’s state of mind when buying and selling securities on the financial markets. The psychology of trading is an aspect that affects both the aggressive trader and the long-term investor who trades sporadically.

Each emotion will, one day have a negative impact on your ability to be systematically profitable. The book contains numerous visuals and graphs to aid in comprehending how emotions influence trading decisions. Geared towards novice investors familiar with technical analysis, 

The Psychology of Trading explores the impact of emotions on trading outcomes. Readers can expect to gain insight into this subject and more through the informative content within the book.

Comprehending emotions during winning and losing periods
The influence of emotional pitfalls
Achieving self-control and its advantages
Strategies for enhancing your likelihood of triumph
The significance of a trading strategy and its guidelines

To gain a deeper insight into the emotional aspect of trading, the writer introduces an enhanced idea that links emotions and market cycles. Managing emotions becomes an extra resource alongside technical and fundamental analysis, all aimed at optimizing profits.

Trading Psychology 2.0 by brett steenbarger

This is a thorough trading guide to the psychological aspect in trading. Trading psychologist and market wizard Brett Steenberg gives valuable advice and practical strategies to assist you in better understanding the world of trading. 

The book abounds in case studies, illustrations and practical examples. The author brings fresh perspectives drawing upon his own trading journey. 

If you want to be more engaged and involved in the author’s ideas you can read his blog and consult its X account for more tips.Trading Psychology 2.0  offers you an edge, with trading expert practical advice and guidance.

The Daily Trading Coach 101 lessons by Brett N. Steenbarger and Joel Pierson 

Traders are individuals who need to use their personal and financial resources effectively in order to succeed. In his book, The Daily Trading Coach, author Brett Steenbarger assists traders in identifying and utilizing their strengths to achieve lasting profitability. 

With trading coach 101 lessons, you get a consistent approach to addressing common obstacles traders face, offering solutions to overcome them, and providing actionable advice to implement these strategies effectively.

The lessons in this course primarily address the psychology of trading and performance improvement. There is a strong focus on utilizing techniques from psychodynamic, cognitive, and behavioral brief therapy to change negative behaviors and foster positive ones. 

Additionally, the book includes wisdom from 18 successful trading professionals who frequently offer their insights online for self-improvement purposes.

The book is designed to assist readers in becoming their own trading mentor, while also offering guidance and resources for overcoming obstacles and uncertainties in various areas of life.

Market Mind Games: A Radical Psychology of Investing by Denise Shull 

In her book Market Mind Games, Denise Shull tries to solve the mystery of market crashes. According to him it stems from the misinterpretation of our own mind. 

Her approach is radical and original : our emotions have the first and the last word  in our decision making. 

Also when it comes to trading success our emotions are vital. She knows it from her deep experience as an account manager in IBM, trading desk manager and also biopsychology researcher. 

In Market Mind Games, she teaches us how to use emotions as a data tool. She merges her  20 years of researching into a single effective strategy.

A reasonable attitude towards emotions is the only way to thrive in an investing game. The strategies she details shake the  basics of decision psychology. And, most importantly, they also work.

The Disciplined Trader, Mike Douglas

Another trading book on our list, written By Mark Douglas.Here, the writer offers various trading methods but most importantly explores the psychological challenges traders face navigating the market volatility.

It focused on mental clarity,  trading discipline, and emotional control in successful trading. It teaches the investors and traders to  approach the market strategically and helps them avoid common emotional pitfalls and make wise decisions in opening positions. 

Trading for a living, Dr. Alexander Elder

This book covers the vital sides of trading, including psychology of trading, risk management and technical analysis. 

Regarding the psychological aspects of trading, it offers guidance for traders and investors to understand their own negative emotions, manage them properly, and develop discipline habits. 

Trading for a living is a valuable resource for those wanting to create a well founded trading career, mixing psychological strategies with successful trading techniques.

Best Loser Wins: Why Normal Thinking Never Wins the Trading Game – Tom Hougaard

“Best Loser Wins”, a book by Tom Hougaard, a successful retail trader,  offers insights on trading and mindset. The author emphasizes the importance of thinking differently and managing one’s mind in order to achieve exceptional results in trading. 

The book offers a unique perspective on how to elevate one’s trading game by focusing on mental approach rather than just technical analysis. By understanding the impact of markets on one’s mind you’ll be set for success in trading.

The psychology of money – Morgan Housel 

Psychology of Money Morgan Housel’s ‘The Psychology of Money’ offers insightful narratives about how people think about money and the peculiar ways they behave with it. 

Traders will benefit from understanding the psychological factors driving decisions when money is on the line. 

The book covers a broad range of topics, from risk management to the influence of ego in financial decisions, making it a vital read for anyone looking to develop a more thoughtful and disciplined approach to trading.

Reminiscences of a Stock Operator, by Edwin Lefèvre

One of the oldest and most influential trading psychology  books was written in 1923. Itćs a Reminiscences of a Stock Operator, by Edwin Lefèvre. Despite its age, it remains very popular eighty years on.This is a timeless tale that will enrich your life―and your portfolio

The best non trading psychology books to boost your motivation

It is essential to understand that technical knowledge of trading is not enough to succeed as a trader. Self-management and psychology are key elements in controlling your emotions and avoiding panic during fluctuations in financial markets and cryptocurrencies. 

This is why we present to you the best books to succeed in your projects as an investor or entrepreneur. The books we present you below are not specifically trading books. But they enable you to acquire and put in work your best habit in order to enhance all aspects of your trading business.

The Power of Habits by Charles Duhigg

We all have bad habits that sometimes hinder our daily life from achieving our goals. Charles Duhigg’s book delves into the creation and utilization of habits to enhance both personal and professional aspects of our lives. 

It offers practical tips on forming new habits and modifying existing ones that may no longer be beneficial. This guide is essential for anyone seeking to gain insight into habits and elevate their quality of life.The 4-hour workweek, by Timothy Ferriss

This book demonstrates effective methods for reducing workload, boosting earnings, and enhancing overall well-being. It offers techniques for optimizing productivity and efficiency to create more time for personal priorities. Targeted towards entrepreneurs, freelancers, and individuals seeking to enhance their work output, this book equips readers with the means to eliminate mundane tasks and concentrate on meaningful aspects of life.

Atomic Habits by James Clear 

 This is not a trading book, but it is very applicable to trading. I found it helpful in creating routines and learning how to form the good habits/avoid the bad habits necessary to follow the rules of my trading system. A book that everyone would benefit from reading. He also has a great weekly email with ideas and quotes to think about.

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