Written by Jet Toyco, trader and trading coach
Many traders ask questions like:
- "What’s the best book for price action?"
- "Can you recommend a book about Elliott Waves?"
- "Which trading book covers indicators best?"
- "What advanced trading books would you suggest?"
With countless trading books available, how do you know which ones are worth your time?
The answer? It depends on your current stage as a trader.
In this guide, we’ll cover:
- Common mistakes when reading trading books
- Best books for newbie, wounded, and pro traders
- How to maximize learning from trading literature
The Biggest Trap When Reading Trading Books
Trading books cost both money and time—so use them wisely.
Mistake #1: Finishing the Book Before Applying Concepts
Reading a trading book is a journey, not a race. If you wait until the end to test strategies, you’ll forget key details.
Solution: Keep these open while reading:
- Trading charts
- Notebook
- Trading journal
👉 Learn how a trading journal improves results
Mistake #2: Reading Books That Don’t Match Your Skill Level
Are you struggling to retain information? The book might not align with your trading stage.
Three Stages of a Trader:
- Newbie Trader – Focuses on strategy basics.
- Wounded Trader – Learns risk management after losses.
- Pro Trader – Balances strategy, risk, and psychology.
Identify your stage—then choose books accordingly.
Best Books for New Traders
1. Market Wizards (1st Edition)
This book features interviews with legendary traders, revealing their mindsets and principles.
"I feel my success comes from my love of the markets. It is not merely a hobby—it’s my life." – Ed Seykota
Why read it? It reshapes how you view trading as a career.
2. How to Make Money in Stocks
A stock trading classic with timeless principles:
"Most bull markets last two to four years." – William O’Neil
Best for: Stock traders building foundational knowledge.
Best Books for Wounded Traders
3. Trading in the Zone
A must-read for overcoming psychological hurdles:
"The market doesn’t create your attitude—it reflects what’s inside you."
Key takeaway: Master your mindset to improve consistency.
4. The New Market Wizards
Advanced strategies for traders recovering from losses:
"If trading is a source of negative emotions, you’ve already lost."
Ideal for: Traders refining risk management.
Best Books for Pro Traders
5. Following the Trend
A statistically backed trend-following system for futures traders.
6. Mean Reversion Trading Systems
Backtested strategies for mean reversion traders, including code samples.
Best for: Traders optimizing edge with data-driven methods.
FAQs
Q: Should beginners read trading books?
A: Yes—but focus on foundational books like Market Wizards before diving into advanced material.
Q: How do I retain more from trading books?
A: Apply concepts immediately in live/demo trading instead of passive reading.
Q: Are free online resources enough?
A: Free content is great for basics, but books offer deeper, structured learning.
👉 Explore more trading insights
Final Thoughts
- Newbies: Start with Market Wizards and How to Make Money in Stocks.
- Wounded traders: Study Trading in the Zone and New Market Wizards.
- Pros: Leverage statistical books like Following the Trend.
What’s your favorite trading book? Share in the comments!