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Trading Psychology Books Must Read For Every Trader

Trading Psychology Books- Must-read for every trader

Last Updated on: 16th November 2023, 11:19 am

Do you wish to become a successful trader? To do so, you simply must master trading psychology! Emotions are the biggest wreckers of trades out there. They cause absolute bedlam.

Without mental strength, even a good trading strategy is worthless. To master the trading strategies, there are several books available that can help you to great extent.

Welcome to the trading psychology book fair! We will be discussing the most intriguing, stimulating content out there. Read this article till the end to know about some of the best trading psychology books that are a must-read for every trader. 

These best and most popular books can better help you to understand trading indicators and various trading strategies. Here’s a complete guide, so let’s start now!

5 Best Trading Psychology Books: 

Books are a great source of gaining information regarding any topic. To improve your daily trading strategy, here’s a list of 5 best trading psychology books you must read once:

The Hour Between Dog And Wolf: Risk Taking, Gut Feelings, And The Biology Of Boom And Bust

Authored by John Coates, this trading book destroys not a few of the fallacies we carry around about ourselves and our trading behavior. Through this book, the author shed light on the following points: 

  • Given that the body and brain are intricately interconnected, we ought to treat them as a unit; 
  • Neuroscience and human psychology change with the winning and losing of trades; 
  • Decision making is not a wholly conscious process; 
  • Preattentive processing is far more impactful than conscious processing;   
  • Intuition is significant pattern recognition; 
  • Helps traders control risk, manage money and enhance trading skills;
  • Communal and interconnected biochemistry prepares us for boom and bust cycles. 

There’s ground for building muscles for the mind. There have been sufficient advances in biochemistry to warrant this observation. 

In the book, Coates describes the Psychological changes that take place on the winning and losing of trades. The hormonal dance thus unleashed sets the tone and tenor for boom and bust cycles. We are obedient like humble servants to hormones. 

The titular hour between dog and wolf is when we have been sufficiently stimulated to act. This transformation can be channelized. If you manage this well, you end up building wealth. Conversely, your day trading career can truly ‘go to the dogs’. 

Major Takeaway: 

  • The above material has every day, real-life applications. That’s how potent trading psychology books are.
  • The lessons in Coates’ book are there for you to leverage. You can start an impactful process that combines real-time awareness of the state of your body, feelings, and thoughts. 

Trading in the Zone:

You will have a large number of readers who opine that Mark Douglas’s “Trading in the Zone” is one of the best trading psychology books out there. 

Contradictions, conflicts, and paradoxes in the thought process can be disastrous for even well-grounded, shrewd, and modern traders. Mark Douglas, himself a trader, personal trading coach, and industry consultant for the past three decades, addresses five particular trading issues, proffering traders insight that will make them consistent winners. 

The book shed light on the following topics:

  • The specific solution to the people factor of price movements; 
  • How lack of focus and trading confidence Marrs stocks picking; 
  • The probabilistic mindset. 

Douglas’s aim has been to help you gain an edge in the financial markets. It is possible to combine a knowledge of the real you and the real Wall Street to obtain trading consistency. The power of the trader’s psyche receives attention. Gaining new knowledge of the same, you are led on to unprecedented profitability. 

Major Takeaways: 

  • Offers primary source to learn trading stocks
  • The author explained trading Psychology in the simplest way possible.

Reminiscences of a Stock Operator:

The book, written by Lefevre, is a constant in the frivolous book marketplace. Published a few years after the Great War, the book undertakes to describe the life and work of the legendary trader, Jesse Livermore.

Bringing together rich storytelling with a trader’s perspective, the book tells a compelling tale that makes for compulsive reading. Fortunately, every time you go through it, you encounter new finds. A beneficial reading for your trading success. 

The book has proven to be a pleaser for all classes of traders. Even a beginner trader can take away a lot from the tale. Biographies have always been favored. For traders, it is only fitting that we learn about past greatness. Above all else, we will learn never to repeat mistakes. 

Major Takeaways: 

  • Based on the life of veteran trader Jesse Livermore.
  • A must-read for new traders who are willing to enter the stock market.

Market Mind Games: 

Author Denise Shull’s experience as a daily trading coach and technical analysis is combined with diverse references to the literature of fields like Biology, and Psychology.

The book plunges deep into the science behind trading psychology. Denise Shull has probed the reasons driving human emotion and thought processes when faced with high pressure and uncertainty.

Most people, in general, lose their bearings when faced with probabilities. We are very poor at evaluating outcomes where there are many unknowns, and high pressure to be right. 

Truth to tell, people are worse than random when it comes to forecasting. More often than not, we cannot predict the financial markets properly without letting emotional interference get the better of us. 

Further confounding the confusion, this leads to our perceptions of risk being skewed as well. Shull helps you turn your emotive liabilities into assets. Her book will help you rein in the breakaway demons of negative emotions.

You will then be able to use emotions positively and help you reach peak performance. It also includes how we can build good mental habits and self-awareness.

Major Takeaways: 

  • The book highlights basic concepts common to trading psychology books such as embracing your feelings, understanding their nature, and trading rules in the stock market.
  • Helps new traders in understanding the market psychology to start trading.

Sway: The Irresistible Pull Of Irrational Behaviour: 

Sway is a rare page-turner in the non-fiction category, written by Ori and Rom Brafman. The writers address issues that many top traders are aware of yet are helpless to address.

They cover everything from why it’s so difficult to break out of losing trade to why individuals stay in poor relationships. The book delves into difficulties that most traders aren’t aware of.

The writers delve into how danger and risk influence decision-making and how the two interact when dealing with market risks. Diagnostic bias—the incapacity to perceive beyond an initial hypothesis despite evidence to the contrary—is also discussed in the content.

They also explore the chameleon effect, which refers to a person’s tendency to adopt features that have been attributed to them.

Major Takeaways: 

  • A must to read and a great book for retail traders, intelligent investor, average trader, aspiring traders, professional trader, and successful traders.
  • Helps both new and successful traders in understanding how risks can influence decision-making.

Trade Mindfully: 

We now come to the groundbreaking book that has won raving reviews from peer scholars. Published in December 2014, Trade Mindfully is considered the best Psychology book for every sort of trader. In addition, the research and stories in this book can also teach the reader about hidden motivators that drive decision-making.

The book explains the examples of psychological pitfalls that anyone can fall into. Each time you read it, you’ll find new insights as you build knowledge of the subjects.

Here are some of the reasons behind the wide popularity of this book:

  • Described as likely the most useful book for the last two decades;
  • A trailblazer combining Eastern philosophy with sports psychology;
  • Significant cutting edge concepts lucidly presented;
  • The book presents profit maximization and ways of getting financial freedom;
  • Easy to understand, accessible to all traders regardless of their level of experience;
  • Helps in understanding why traders fail.

Best of all, there’s a raving review by a top-ranking author Brett Steenbarger. The latter is in every list of good trading psychology books. He says that Dr. Dayton’s book is the best he has read, combining mindfulness with daily trading.

Steenbarger goes on to say that Dr. Dayton explains the problems that generally plague traders, drawing upon thorough research to show how mindfulness and a process orientation can address these effectively.

Major Takeaways: 

  • A blueprint for better trading decisions and great trading results.
  • Recommendable for traders for holistic training.


That’s all! those were the best trading psychology books, there are several other trading books such as Market Wizards, Self Discipline and The Disciplined Trader: Developing Winning Attitudes, and many others, that can help you to a great extent. All these old and new books are useful in their own right.

On the other hand, trading psychology is a vital offshoot of Psychology. We are indeed fortunate that scholars have taken the initiative in making the murkiness of the trading mind decipherable. This has had a great impact on education and training. 

Future generations of traders will be indebted to such popularisers of trading psychology. Just like most brokers like ABinvesting,  have democratized trading, so too brilliant academicians have brought home to us the whole scientific truth. 

Neither life nor trading can be wedded to prejudices. Clarity of mind requires good instruction – which these psychology books on trading are always willing to provide!

Emma Hoxha, a self-taught forex trader and author from the US, inspires others with her journey in the financial markets. Through dedication and self-education, she has developed a deep understanding of forex trading. Emma shares her expertise through insightful articles and books, empowering individuals to take control of their financial futures. As an active participant in the trading community, she provides guidance and support to aspiring traders, demonstrating that success is attainable through passion and perseverance.

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