Traders should never stop learning to improve their results over time. All knowledge that modern traders have is from books that were written in the past by famous market participants who managed to make a lot of money or were strong in theory and helped renowned traders and investors to make their path to success. By reading this article, you will see the most interesting books that are recommended for reading to find inspiration in trading.

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1: Market Wizards

This one is among the most popular books about trading ever, and it is a must-read for beginners. It provides newcomers with a deep understanding of trading mechanics in quite an entertaining way. Instead of giving another boring reading, the author decided to write a book, which is full of interviews showing how famous traders started and what helped them become who they are.

About the Author

Jack Schwager is a known name in the world of trading. The famous fund manager was the partner of Fortune Group, a London-based hedge fund advisory group. Currently, he is the co-portfolio manager at ADM Investor Services Diversified Strategies Fund. He wrote 12 books where he shares some interesting strategies for both investing and trading.

The list of traders who were interviewed for this book, released in 1989 is impressive. You will see comments from such personalities as:

• Bruce Kovner – American billionaire hedge fund manager with his own funds surpassing 8 billion US dollars;
• Ed Seykota – commodities trader who pioneered systems trading and used card computers to test his trading ideas,
•  Paul Tudor – the owner of Tudor Investment Corporation with own capital surpassing 8 billion USD;
• Richard Dennis – the famous Prince of the Pit, a commodities speculator who made over $350 million over six years;
• Tom Baldwin – a bond trader who was introduced in the Future Hall of Fame in 2009.

And many others. The book is full of practical recommendations related to money and risk management and another important aspect of trading. Here are some of the key points that you can take from it:

• The focus is on defensive trading, which means that a market participant should focus more on not losing money instead of trying to make big money quickly;
• Only the market is right. You should adapt;
• Use the momentum and trade along the trend;
• Extend good trades and work on your mistakes to avoid bad trades.

The book caters to all types of traders. It does not contain any strategy that will allow you to apply it on the spot. However, it is full of useful recommendations that professional traders and investors share with readers.

2: The New Market Wizards

Jack Schwager decided to extend his success with a newer version of the book (1994) where traders can find even more interviews with famous traders and investors who made a fortune by buying or selling assets. This time, Jack Schwager invited new trading and investing gurus, including:

• William Eckhardt – the developer of numerous trading systems using a unique portfolio theory and computer analysis;
• Stanley Druckenmiller – American investor and billionaire, who is believed to be one of the most successful traders ever ($4,8 billion); 
• Linda Bradford Raschke – American futures and commodities trader. Founder of the LBR Asset Management;
• Blair Hull is a famous American investor and politician and the founder of Hull Tactical Asset Allocation.

The new book covers the following points:

• Letting profits grow. This point is valid for trend markets only;
• Traders should have plans for various situations even for the worst that may happen and they won’t be negatively surprised;
• Discipline is the key to trading. Letting emotions rule your trading is not a good idea;
• A trade does not matter, a set of trades matters;
• Every trader should have their own strategy that they fully understand and follow.

Similar to the first part, there are no strategies inside, but the book will be interesting to all categories of traders as it unlocks some powerful recommendations that you can apply to your trading routine.

3: Trade Your Way to Financial Freedom

The author of the book is a famous US investor and founder of his own institute is known for his deep understanding of trading psychology. Van K Tharp has created a lot of trading systems throughout his career. The book is written in a way so that even those who have never heard about trading and financial markets can read it without any problems.

About the Author

Currently, Van K Tharp is a professional coach for traders and investors. Maestro uses his own experience and skills to fine-tune strategies and psychological approaches to trading. For over 30 years, he has been helping market participants find their own way to make it through various market conditions. He is running VTI (Van Tharp Institute), the first professional educational establishment for traders and investors.

A lot of attention in the book is paid to risk and money management. The author describes his own approach to them. Moreover, the book will help beginner traders understand how to create their own trading strategy in a structured way. In addition, Van Tharp goes through all themes related to trading, which means that this book can become your guide in the world of the financial markets.

The key takeaways from the book include:

• It is possible to create a fits-it-all strategy, but it should comply with the trader’s abilities and personal traits. There are several psychological aspects that prevent traders from making money even if they use a very good and structured trading system;
• To create your own strategy, it is worth applying a structured approach and those tools you are well aware of;
• Entries are important but they are not the main aspect of a trading system;
• Money management is among the key factors of success;
• Good entries can’t lead traders to gains if money management is poor;
• Small accounts may be dangerous as you won’t be flexible in position sizing.

The book will be useful to traders having problems with money and risk management or those who want to improve their approach. 

4: Way of the Turtle: The Secret Methods that Turned Ordinary People into Legendary Traders

In his book, released in 2007, which can be considered a “biopic in the world of books” Curtis Faith narrates his own story that begins when he was a 19-year-old teen and stretches to his participation in the famous Turtle Traders community. This group was an experimental community led by Richard Dennis who believed that everyone could start trading successfully if they followed a set of rules.

About the Author

Curtis Faith was one of the participants of the legendary group and managed to make over $30 million on his own. He owned a Borealis hedge fund firm and wrote his famous book which was released in 2007.

The book delves into strategies and trading systems and explains the trading mindset that the famous trader transferred to his focus group. Moreover, it contains some interesting points about risk and money management, which are the cornerstones of successful trading.

Apart from this, the author pays particular attention to all the key aspects of trading, including trend-following strategies and psychology. He speaks about discipline, patience, and sticking to a proven strategy as it was among the key factors of the success of this famous group. The key takeaways from Way of the Turtle include:

• Every trader can become successful if they stick to a set of rules;
• To start making money in the financial markets, traders should be able to keep a disciplined approach and stick to their strategies;
• The main idea of the Turtle strategy is to buy or sell during breakouts and get rid of an asset during retracements;
• Money and risk management are the cornerstone of successful trading.

By reading this book, both beginner and skilled traders will learn more about this famous Turtle strategy and how it can be used in various market conditions. This system is time-proven as many Tutrle graduates ran their hedge funds successfully.

5: Naked Forex: High-Probability Techniques for Trading Without Indicators

In his book, which was released in 2012, Walter Peters describes several strategies and technical analysis tools that allow market participants to build their own trading systems. The author is a psychologist which helped him become a very successful trader on his own. However, psychology is not among the hottest topics for traders and they always postpone reading about it. This book is no different. 

About the Author

Walter Peters has PhD in psychology and he is a full-time Forex trader. Moreover, he is a podcast host and narrates to his audience about trading in the financial markets. 

Apart from the psychological part, which provides you with the experience of the famous trader, you will read about his strategies and the technical tools that he uses. One part is devoted to trading systems that are explained in detail. Unlike many other books about trading, the author takes time to delve into the reasons why his strategies work. This is very important as traders will have an opportunity to understand what lies behind success in trading.

One of the biggest problems with most books about trading especially those specialized in technical analysis is that they just say how to do it. They do not plunge into details and do not explain the reasons behind success. This may mislead readers and make them hostages of such strategies instead of making them those who manage such trading systems. Apart from describing how a system works, the author makes it very clear about why it can make you a successful trader. The key takeaways from this book include:

• Technical analysis can provide you with a wide range of good strategies that will help you generate profits;
• Understanding a strategy is better than simply following it blindly;
• A simple strategy may be more effective than a complex one;
• A trader should understand why using a particular indicator in order to avoid overloading of charts.

Who will this book be useful to? First of all to all those who begin their ways in the financial markets. It is not about a particular strategy but about the philosophy of trading and how to apply various instruments and systems during a trading routine.

6: How I Made $2,000,000 in the Stock Market

The book released in 2011, narrates the story of a successful investor who enters the market with little knowledge about how it works. The path was not bright as there were a lot of beginner’s mistakes he made. After making significant profits, losses occurred. The career of this famous investor looked like a rollercoaster. However, he managed to find his own Holy Grail and make a significant fortune. The backbone of his strategy was to find opportunities when assets were leaving the range. For instance, if an asset fluctuated between $90 and $100 he bought it when the price exceeded $101. Moreover, Nicholas Darvas was using a strict money and risk management approach which allowed him to avoid heavy losses.

About the Author

Nicolas Darvas, the author of this best-seller was not just another stock market trader or investor. He was a professional dancer with a bright career in front of him. However, at some moment, he was paid in shares of a mining company which brought him $8,000 and was a turning point in his life. This opportunity changed his life forever and he decided to learn more about trading stocks and investing in various assets. Nicholas Darvas managed to make $2 million and decided to write a book about his financial markets journey.

The book covers psychological aspects as well. By reading it, you will see how the famous trader learned to be patient and began to control his emotions to put them aside from trading. By reading it, you will find the following ideas:

• Everyone can become a successful trader if sticking to a set of rules;
• Trading breakouts allow you to make money on shart price movements;
• Psychology is one of the key aspects of success in trading;
• Strict money and risk management rules will allow you to grow your balance gradually.

Who is this book for? To tell the truth, this book does not offer any working strategy and can be used for motivational purposes only. By following the story of Nicholas Darvas, you can change your trading approach and rethink the way you open positions.

7: Trading Chaos: Maximize Profits with Proven Technical Techniques

The book covers one of his theories about the chaotic features of financial markets. According to Bill Williams, neither economic nor technical factors allow market participants to have a clear picture of the market. Therefore, he suggested an alternative approach that involves the chaos theory. At some points, market fluctuations are chaotic, but in some moments, they become trendy and market participants can use this information to engage.

About the Author

Bill Williams is a well-known trader who was among those promoting technical analysis through how theories and technical indicators. The famous Alligator developed by him serves as the key technical indicator for many professional traders. 

The Alligator indicator allows traders to find when chaotic short-term tight fluctuations come to an end and a one-sided movement takes place. By reading the book that was released in 2004, you will find the following points:

• While not being perfect, technical analysis will allow you to increase your chances of profiting in the financial markets;
• Chaotic fluctuations take place most of the time;
• Traders should be aware of the moment when the situation changes and be able to react to such changes;
• None of the methods guarantee success, but technical analysis allows market participants to build robust and helpful strategies that will eliminate random trading and make all decisions more informed.

The book is recommended for beginners as well as those who are not familiar with the famous system developed by Bill Williams. It contains some useful explanations that you can use to improve your trading results. 

8: The Alchemy of Finance

This is a must-read for all who want to understand how financial markets work and why prices move in one or another direction. Written by the famous billionaire George Soros, the book contains the philosophy that helped him navigate through various market situations and make his fortune. Alchemy of Finance (1987) goes beyond the standard perception of trading as a set of technical analysis rules that you should apply to succeed. The author describes the deep reasons for the price to move in the direction it does.

About the Author

George Soros is a famous trader, investor, and philanthropist. He owned Quantum (former Soros Fund Management) the famous fund that managed to make billions of dollars. George Solor is famous for the trade that he made against the Bank of England in 1992 that brought his fund over $1 billion, while the total position was more than $10 billion.

The book begins with a description of reflexivity, the idea that markets tend to understand current conditions and react to them, which, in turn, leads to various price fluctuations. According to George Soros, the market is constantly changing and prices sometimes dictate fundamentals. For instance, a stock with a high price may increase the company’s credibility and other factors that will affect fundamentals in the future. This reflexivity is a self-reinforcing engine that may contribute to both the boom and bust cycles in the stock market.

Those who are interested in the Forex market will find a lot of interesting about reflexivity in currency prices in the middle of the book. For instance, he says that changes in the dollar can influence the trade balance, economic strength, and debt. George Soros was always trying to find some so-called “market themes” that were the main price drivers for a particular period. Once found they should help traders understand the main trend and avoid trading on its deviations. Some of the key takeaways from his book are listed below:

• Traders should be more flexible when analyzing financial markets and making decisions;
• If you are not convinced about something, it is better to skip a trade and do nothing;
• Avoid trading when classic patterns break and wait until the situation normalizes;
• Do not stick to your old beliefs if you see that the situation is changing;
• Once the market admits the changes, the rules will change again;
• Do not be fooled by situations when things go well;
• Think about a range of scenarios instead of sticking to a single one that you believe will work;
• Adapt to situations when there are two conflicting ideas at a time.

Reading this book may be useful to everyone who wants to understand the underlying principles of price fluctuations. However, if you are a beginner and want to focus on technical analysis, you can skip it for a while and get back to it later if you want to deepen your knowledge about the financial markets.

Conclusion

These are not all the books that you can have on your bookshelf or your hard drive to read later. Some more may also be very interesting to you. However, we have tried to put together books that are a must-read for all types of traders. They cover mostly all aspects of trading starting from technical analysis to market psychology and fundamental analysis. Whether you are currently trading or still using a demo account to practice, you can start reading them one by one to find some interesting ideas inside.

The books will not give you answers to all questions about trading you may have. However, they may guide you by showing you some examples or motivate you to help you navigate through tough periods by showing you examples of how losses may turn into success if you stick to the idea of going on instead of giving it up.

FAQ

Can I Learn Trading from Books?

Yes and no. Most books about trading do not provide detailed guidance on how to apply a particular strategy. However, they may be extremely useful as by reading them, you will learn more about the experience of famous traders and their strategies.

What Is the Best Book About Trading?

Similar to technical analysis where there is no best indicator for forecasting price fluctuations, there is no best book for trading. Every book you read will give you something that you may miss in your own trading routine.

Should I Read a Lot of Books Before Conducting My First Trade?

Reading is a never-ending process. There are plenty of books that may attract your attention. The best approach is to start trading with a strategy that allows you to grow your balance over time and then read books to hone your skills over time.

Is It Possible to Become a Successful Trader Without Reading Books?

Yes, sure. You can have some strategies that will bring you success even if you haven’t read anything about trading in such books. However, reading them will help you add the experience of those who made millions into your own trading approach.