The Top 5 Best Trading Psychology Books
Updated: Mar 24
You can learn from the greatest investors by reading these excellent stock trading psychology books.
Why you Should Read Stock Trading Psychology Books
Studying the greatest of all time is the best way to learn about trading the stock market. The well-known stock market wizards like Mark Minervini, Philip Fisher, and Jesse Livermore have written the best stock trading books about their experiences.
Experienced investors with high-performing track records have traded through various market conditions and are filled with knowledge.
However, knowledge alone does not make you a good investor in the financial markets. You must combine knowledge, trading psychology, and risk management to become successful.
The following list includes trading psychology books, books on swing trading, and even day trading books.
Regardless of your trading style, you can learn something from others' perspectives on the stock market.
The Best Trading Psychology Books:
1- Reminisces of a Stock Operator
This book highlights the life of an American stock trader named Jesse Livermore. Livermore was born in 1877 and began his career trading by posting stock quotes as a board boy at a stock brokerage. After spending hours updating stock prices, he started to notice patterns and the ability to use technical analysis.
Livermore would trade in bucket shops that took leveraged positions on stocks but didn’t own any. He won so much that he was banned from entering all the bucket shops in Boston. Livermore has made and lost millions of dollars over his lifetime, and the stories about him are helpful for any aspiring stock trader to hear.
Livermore is one of the first day traders, making his book one of the best day trading books to read. The book is beneficial for all types of traders, but it is unique since he is one of the first people to ever day trade stocks.
2- Trade Like a Stock Market Wizard: How to Achieve Super Performance in Stocks in Any Market
Mark Minervini is considered one of the most legit stock traders because of his record-breaking performance in multiple U.S. Investing Championships. In 1997, Minervini placed 1st with an audited 155% annual return. He also won the U.S. Investing Championship in 2021 with an insane 334.8% return.
Minervini’s key to success is a combination of technical analysis and fundamental analysis. He recommends that investors only buy stocks in an uptrend with strong earnings and a positive catalyst.
This is one of the best books on swing trading because Mark Minervini's trading strategy involves holding winners and cutting losers quickly.
3- Common Stocks and Uncommon Profit and Other Writings
Philip Fisher is known as one of the greatest investors of all time. This book was initially published in 1958, and the investment philosophies of Fisher remain relevant in today’s markets. Many investors consider this book a bible of investing, so it is a must-read for all stock investors.
While the philosophies in this book are still relevant today, some of the information is a bit dated. However, this doesn’t mean there isn’t much value you can get out of this book.
4- One Up On Wall Street
Peter Lynch is one of the most successful investors of all time and was the former Fidelity Magellan Fund manager from 1977 to 1990. Lynch averaged a 29.2% return making the Magellan Fund the best-performing mutual fund of all time.
In this book, Lynch preaches that the key to investing is to keep it simple. He explains how anybody can outperform “smart money” simply by using common sense. The lessons learned from this book will surely improve your investing skills and mindset.
5- Market Wizards: Interview with Top Traders
This book is a compilation of interviews with the best investors of all time. Jack Schwager conducted these interviews, and his goal was to figure out what separates the greatest investors of all time from everybody else.
The most common traits found in these fantastic investors were risk control, patience, commitment, and discipline. Most of the traders in this book used trend-following strategies to ride uptrends. Capital preservation is another critical metric that allowed them to rack up great returns in the stock market.
The Best Trading Psychology Books | Bottom Line
The best books to learn stock trading are written by successful investors. The information in these books is priceless since you can get inside the mind of the most successful stock traders.
Whether you want to day trade or invest in stocks long-term, it never hurts to gain insight from those who are successful in the stock market. I would consider all these fantastic trading psychology books because psychology is a massive part of trading.
If you are interested in options, I also have an article on the best options trading books and the best Robert Kiyosaki books!
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