List of Best Books On Trading Psychology: Individuals learn various strategies and techniques in order to make money in the stock market and irrespective of how much they learn, they may fall short while actually executing the trade. The major reason for this can be the trader’s emotions.
Emotions can play an important role while determining the success of an individual while trading. The way an individual can overcome these emotions while trading is by understanding trading psychology.
This is why in this article, we will be covering the best books on trading psychology that can help you understand your actions while trading better.
List of Best Books on Trading Psychology
The following are the best books on trading psychology that every trader should read.
1. The Psychology of Trading by Brett N. Steenbarger
The author of this book is an associate professor of Psychiatry and Behavioral Sciences at SUNY Upstate Medical University in Syracuse and also an active trader.
In this book, he demonstrates how traders can identify, interpret and change the problems that get in the way of a successful trade. He also takes up real-life case studies and gives techniques that assist traders to handle or change their emotions.
Some unique concepts like “Trading from the couch” by using emotions as valuable market data, and techniques for analyzing and trading against the emotions of market participants set this book apart from the other books, As a result, this book is ranked first on the list of Best Books on Trading Psychology.
2. Trading in the Zone by Mark Douglas
The author of this book was a former trading coach and a full-time trader. Mark Douglas and Paula T. Webb have collaboratively developed seminar and training programs on trading psychology for the investment industry and for individual traders.
In this book, the author talks about the reasons why traders lack consistency and guide them to overcome those mental habits which cost them money. This will guide you to alter your behaviour positively and help you look at important aspects that make a successful trader.
The author took 7 years to complete this book and it is considered the “bible of trading psychology”.
3. Reminiscences of a Stock Operator by Edwin Lefevre
The author of this book was an ambassador of the united states in 1909. After the end of his career, he returned to his literary work, writing novels and contributing short stories for magazines.
This book describes Livermore’s ascent from a “boy plunger” to the most influential speculator on Wall Street. Although the book focuses on Livermore’s experiences, a greater portion of the book deals with trading wisdom and rules that Livermore imparts through Lefevre.
The book states Livermore’s view that the market is made up of people and the majority of the market is reflected by mass psychology and the mistakes of individuals are frequently the result of the inability to control fear and greed.
4. High-Performance Trading by Steve Ward
The author of this book started out in sports and performance psychology. Later in his career, he has worked with traders, fund managers from top investment banks, hedge funds, global energy companies, and asset management funds, leading proprietary trading groups and independent retail traders.
This book provides its readers with proven techniques and strategies to help all types of traders to improve their trading performance and psychology.
The book is based on practical training and coaching interventions, personal experiences, and advice from top traders, trading coaches, and trading psychologists. It can provide you with insights to become a better trader.
5. Market Mind Games by Denise Shull
The author of this book is the founder of a risk and performance advisory consulting firm called Rethink Group. She develops radical theories by combining knowledge from 25 years of experience in the real world of markets, neuroeconomics, and psychodynamic psychology which is well received by the public.
In this book, Shull describes how human sideline their emotions in order to make good decisions and increases the risks we take. Through this book, she advises us to treat feelings as data and says that doing so eliminates the question that repeats itself in our heads after making a poor investing decision: “What was I thinking?”.
In this book, she tries to connect our emotions, beliefs, and context to our reaction to uncertainty and risk. She has created a very effective strategy by combining 20 years of study on risk decisions which can be found in this book.
6. Mastering Trading Psychology by Mike Baehr & Andrew Aziz
About the Authors
Andrew Aziz: He is a trader, investor, proprietary fund manager, and a recognized member of the Forbes Business Council. For more than five years running, he has been one of Amazon’s top 100 authors in the “Business and Finance” category. (2016-2021).
Mike Baehr: He is a Chief Training officer at Peak capital trading and one of the trading coaches at Bear Bull Traders. He has collaborated with several trading psychologists while building curricula for Peak Capital Trading and Bear Bull Traders.
About the book: The book describes technology, strategy, and psychology as the three essential pillars of successful trading, out of which psychological aspects of trading are the most likely to be underestimated or even ignored.
This book helps traders improve their understanding of these important pillars of trading and helps us improve our mental skills which can improve our performance.
This book also mentions more than 175 stories of various retailer traders that allow you to peek into their thoughts during their successes, their failures, their joys, their struggles, and, most of all, what they have learned as traders, Which makes this book rank last on the list of Best Books on Trading Psychology.
In this article, we discussed some of the best books on trading psychology that describe the various psychological aspects of trading.
Among the different aspects, one needs to become a successful trader, the most important aspect, which is the psychological aspect is often ignored by many investors. And the important step in mastering the psychological aspect is by understanding it. This will help you take a long way in your trading journey.
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