The best books for stock trading psychology

What do you mean by trading psychology?

Trading psychology refers to a trader’s mindset of a trader while trading in stock market. Certain emotions like greed and fear play important roles in the trading process. If you wanted to be a successful stock trader, you must learn how to handle the market volatility and price fluctuations. Here comes the importance of trading psychology books.

You must understand different trading psychologies and know how to control your emotions while making trade-related decisions. Here are some of the best stock trading psychology books from my research.

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

The author , Mark Douglas is a renowned American trader known for his trading psychology books and seminars. He takes on the myths of the market and exposes them one by one teaching traders to look beyond random outcomes, to understand the true realities of risk, and to be comfortable with the “probabilities” of market movement that governs all market speculation

The main goal of ‘Trading in the Zone’ is how to become a consistent successful trader. According to Mark Douglas, it is a big mistake of the majority aspiring traders does it all wrong by studying the market’s behavior rather than starting looking into one’s own mind. An edge of the trading strategy is just an indication of a higher success ratio, which can be expressed either as more wins than losses or as bigger wins than losses.

A trader will enter a care-free state of mind and will operate “in the zone”, which means intuitive, semi-subconscious trading, resulting in a consistent success . One of the famous quotes from Douglas says, “Once you learn to identify patterns and read the market, you find there are limitless opportunities to make money.””If every loss puts you that much closer to a win, you will be looking forward to the next occurrence of your edge, ready and waiting to jump in without any hesitation”. This book is surely one of the best trading psychology books.

The Disciplined Trader: Developing Winning Attitudes

The author , Mark Douglas is a renowned American trader known for his trading psychology books and seminars.

This book is a classic and one of the first books to introduce the investment industry to the concept of trading psychology. The author describes how and why emotions and beliefs affect your trading decisions. Trading requires much more self-discipline and self-control as opposed to many other activities. The markets do not force you to act one way or another; instead, you are your own boss. You can gain or lose an almost infinite amount of money as a trader, so it’s important to be careful and disciplined because many people suffer disastrous losses due to their lack of discipline and control over their emotions.

It explains how to prevent emotions from causing you to lose money and advice to taking profits when the stock goes up or cutting losses if it goes down.This book is one of the best trading psychology books of all time.

” Secrets of Pivots Boss” by Frank Ochoa

Frank,the author is a premiere trading educator. Frank has educated thousands of traders over the last decade and has become a highly accomplished public speaker.

Secrets of a Pivot Boss offers the most comprehensive collection of pivot-related trading ideas and concepts available to traders.Secrets Of A Pivot Boss is the most complete book of pivot-associated trading concepts.

Whether or not you’re a real-time trader, swing trader, positional trader, or investor, you’ll learn powerful concepts like Two-Day Pivot Relationships, Pivot Width Forecasting, Pivot Trend Analysis, and Multiple Pivot Hot Zone .More over that the best trading secrets like Types of Trading Days, the Types of Buyers and Sellers,Powerful Candlestick Setups and Proprietary Indicators.

“Tools and Tactics for Master Day Trader” by Oliver veliz

Oliver Velez and Greg Capra (White Plains, NY) , the authors of this book are co-founders of Pristine Capital Management, Inc., The Pristine.com is one of,  the top-rated Websites of these trading legends.

This book provides the weapons you need to become a confident, self-empowered, successful day trader. We can learn how to save yourself from years of lost time and money. It contain a step-by-step guide to entering stocks like a pro and exiting your trades like a pro as well. Get a clear idea of things every trader should know Tools and Tactics for the Master Day Trader will help any trader log on with the technical skills, market knowledge, and confidence they need to capture more winning trades, and reap new profits.

” YTR(your trading coach .com) Price Action Trading” by Lance Beggs

The author, Lance Begg is a full time day-trader with a current preference for forex, FX futures . He is the founder and chief contributor of ‘YourTradingCoach.com’, which aims to provide quality trading education and resources with an emphasis on important aspects of trading – business management, risk management, money management and trading psychology.

In Lance Beggs book, he describes the basic principles of markets and price action. He analyses the price within a multiple time frame structure .He finds a comprehensive procedural steps for initial and ongoing bar-by-bar analysis. He develops a processes for trading thesetups – including stop and target identification, entry, trade management and exit. He also discover the tools and techniques required to ensure an effective learning process that help in progressing your trader development journey as fast and effective.

“Reminiscences of a Stock Operator” by Edwin Lefèvre

The author Edwin Lefèvre (1871–1943) was an American journalist, writer, and statesman, most noted for his writings on Wall Street.

First published in 1923, Reminiscences of a Stock Operator is the fictionalized biography of Jesse Livermore, one of the greatest speculators who ever shorted Wall Street. Now, even after 70 years, it is one of the most entertaining books ever written about stock trading, the most widely read, and highly recommended.

He formulated a simple system for trading. Whenever the share price went up, he went long, while he shorted when they went down. If the price of the stocks continued a long trend, he bought more shares. He sold them when the trend stopped. He often use the term: ‘Stock prices move along the line of least resistance.’ By studying trends he detected when a bull market was coming to an end before his fellow traders. He did not allow emotion or rumours to influence his decisions. When he made mistakes – and he made plenty – they were the result of miscalculation and not emotion.

“There is nothing like losing all you have in the world for teaching you what not to do. And when you know what not to do in order not to lose money, you begin to learn what to do in order to win. Did you get that? You begin to learn!Did you get that? You begin to learn!” is a famous quote by the author.

The New Market Wizards: Conversations with America’s Top Traders by Jack D. Schwager

In this book the author Jack D. Schwager interviewed dozens of top money making traders like Bruce Kovner, Richard Dennis, Paul Tudor Jones, Michel Steinhardt and more. Market Wizards isn’t about the trading tips or specific strategies that these traders used to beat the market. It’s about the insights they provide about their trading style, their career and life as a trader.

Schwager also discusses the different psychological approaches to trading, such as how traders can incorporate aspects of Neuro Linguistic Training (NLP) into their trading. There is a lot being talked about trading psychology and human behaviour in this book. It Is absolutely worth reading this classic. This book is very helpful to traders by learning the experiences and mistakes of these legends.

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FAQS on stock trading psychology

What are the importance of psychology in trading?

Traders has to know how to control their emotions like greed and fear while making trade-related decisions. To become a successful stock trader, you must learn how to handle the market volatility and price fluctuations .So psychology is really importance in stock trading.

How to improve your trading psychology?

We can improve our trading psychology through discipline and patience.Control your emotions like greed and fear.Accept your losses in trade and treat it as an opportunity to learn the mistakes and try to avoid it in future. Along with that you can read those books which I have mentioned above.

What are the best books on stock market?

Some of the best books on stock market are ‘Once upon Wall Street ‘ by Peter Lynch,  The Intelligent Investor ‘by Benjamin Graham and ‘ How to make money in stocks’ by William O’Neil .