Top 5 trading books

Dear Traders,

I have been thinking about this subject for a long time. Ever since I started my trading career I have had numerous questions about which trading books are a good read. In the era of internet, books are often disregarded as too limited and not being dynamic enough. Nevertheless, books have always been and will always be an invaluable source of information that you can use for ideas, knowledge and enjoyment. The five books featured in this post have greatly influenced me as a person and as a trader.

Reminiscences of a stock operator

Edwin Lefevre's book focuses on Larry Livingston, who represents a thinly veiled depiction of Jesse Livermore - one of the most famous traders of all time.

Readers can follow Mr Livingston on a trading journey that leads through various instances of him being financially broke then recovering to amass a fortune each time. Each recovery therein, gives him a new strength and will to finally understand the market's behaviour.

This veiled biography of Livermore, recounts his real-life fame for making then losing several multi million-dollar fortunes while short selling during the stock market crashes in 1907 and 1929.

The disciplined trader

One of my favourite trading psychology books by author Mark Douglas, stresses the importance of a proper trading psychology. Emotions are always the enemy of a trader. In fact, even a trader who has limited knowledge of technical and fundamental understanding but has good psychological control, will ultimately be on the winning side.

The author is not ashamed to admit that he has lost almost everything he owned because of his bad trading decisions. That experience led him to a rigorous self-examination, where he discovered that emotions, especially fear, had made him trade with losses.

The candlestick course

Steve Nison is famous for introducing Japanese candlestick charting to westerners. His first book Beyond Candlesticks showed some advanced techniques of candlestick charting. However, this book summarises candlesticks generally - making it ideal for new and experienced traders.

I have studied all the candlestick patterns presented in this book and can confide that Nison's candlesticks have been a major part of my for the PNT ™ and CAMMACD ™ methods. This is a must read for all prospective traders.

Trading in the zone

This is another Mark Douglas' book that has had a huge impact on my trading and charting style. In it, Douglas explains the common dangers of trading and different terms of probabilities. Thinking in terms of odds and probabilities instead of wrong or right, will help you understand the market structure better than the average trader. Douglas explains this ideology well by saying that "to manage risk and allocate capital most efficiently, traders need to be aware of the catalysts, such as earnings, the fundamentals, and the price action of supply and demand". In my webinars, I always state the importance of literally trading within the zone (POC).

Momentum, direction and divergence

This book by William Blau, is the first one I read when I started my Forex career. Blau perfectly yet profoundly describes how most popular oscillators work, including the RSI, Stochastic and MACD. By reading this book I have discovered very effective ways to measure trend and momentum through MACD as well as divergence. This book has given me inspiration for the CAMMACD ™ method and provided me with new ways of identifying MACD divergence, which has always served me well.

Still wondering what you can learn by reading these books? Check-out our video explanation.

As with every list, there will be possible disagreements. Feel free to add your favourite book picks in the comment section below.

Cheers and safe trading,

Nenad and Chris