Stock Trading Books

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7 Best Stock Trading Books

We have compiled a list of books on stock trading that not only provide necessary fundamentals but offer a unique perspective on stock trading along with practical trading tools and techniques which might make all the difference between success and failure. Below are the 7 best stock trading books:

Trading Systems and Methods
Trading to Win: The Psychology of Mastering the Markets
Quantitative Trading Strategies
Trade Your Way to Financial Freedom
Way of the Turtle: The Secret Methods that Turned Ordinary People into Legendary Traders
Entries & Exits: Visits to 16 Trading Rooms
Algorithmic Trading: Winning Strategies and Their Rationale

Let us discuss each of these stock trading books for beginners in detail, along with its key takeaways and reviews.

#1 - Trading Systems and Methods

Author - Perry J. Kaufman

Book Review

This book is a comprehensive work covering an entire spectrum of stock trading strategies and how they work. It is meant for amateur and professional traders, with updated information on trading systems, tools, and techniques essential for successful stock trading. Initially composed nearly 30 years ago, this work has helped several people understand trading better, and it continues to be relevant today in its updated 5th edition.

What makes the work even more valuable is how the author helps create a deeper theoretical understanding of trading systems and methodology from a purely mathematical perspective. At the same time, it builds upon it to explain the integration of fundamental statistics in stock trading techniques and concepts of risk management designed for traders. Despite his thorough treatment of the subject, the author makes sure to make it as accessible and valuable for practical traders as possible. Supplementary websites and tools are added to bring additional practical value to the readers.

Key Takeaways

This stock trading book is a detailed professional exposition of trading systems and methodology, an analytical framework for comparing different trading techniques, and tools for developing unique stock trading strategies for individual traders. The author provides a complete treatment of the subject, covering theoretical fundamentals and a practical application of seemingly complex concepts in an easy-to-understand manner. In addition, spreadsheets and Trade Station programs are added for an interactive learning experience. Finally, a companion website and supplementary learning material make it a continual learning resource for practical traders.

#2 - Trading to Win:

The Psychology of Mastering the Markets (Wiley Trading)Hardcover

Author - Ari Kiev

Book Review

This book is a rare book on the psychology of stock trading, designed to help traders align their psychological motivations with their trading strategies and goals to succeed like anything. This work is a result of a 5-year collaborative effort between an experienced psychiatrist and a seasoned equities trader, making it as authentic an effort as it could be at explaining every aspect of a trader’s psychology defining a set of psychological and behavioral principles which could help a trader overcome any mental obstacles and achieve his potential as a disciplined and focused trader.

It presents a complete approach to dealing with stress, self-limiting beliefs, and potentially destructive behavior patterns which could hurt a trader where it matters most and how self-belief can be reinforced while avoiding the risk of being entrapped by feelings of despair or euphoria, either of which might not do much good for a trader. On the whole, a complete psychological guide to improving trading performance while leading a stress-free life to enjoy the fruits of one’s efforts.

Key Takeaway

An excellent book on stock trading psychology is composed of psychological and trading veterans, bringing readers just the expertise needed for such a topic. It is a well-known fact that mental stamina and positive psychology are as important as expert knowledge of trading techniques and principles to make a success as a trader. This work covers the lesser-recognized aspect of complex psychological issues. It helps a trader learn how to root out negative psychological patterns and master the mental game behind the money game to become a super trader—a recommended read for amateurs and experienced traders.

#3 - Quantitative Trading Strategies:

Harnessing the Power of Quantitative Techniques to Create a Winning Trading Program (McGraw-Hill Trader’s Edge Series)

Author - Lars Kestner

Book Review

This book is an exciting work on quantitative stock trading strategies designed to help traders avoid huge trading losses resulting from market volatility. Quantitative trading relies on an analysis of historical data and employs a purely mathematical approach to identify the best entry and exit points for any trade.

While outlining several systematic trading techniques and strategies and comparing their performance potential for efficient risk and money management, the author recognizes the approach's limitations and offers a novel approach to steps to manage money based on optimal averages. What makes this work unique is its focus on developing a highly individualized approach to quantitative trading, which could greatly assist in realizing the potential of trade under some of the most unstable market conditions.

Key Takeaways

It is a condensed yet specialized book about stock trading that focuses on how traders can benefit by integrating quantitative analysis into their broader trading approach. The author successfully demonstrates how one can utilize a combination of market knowledge along with fundamentals of quantitative analysis to help traders turn the tide in their favor.

#4 - Trade Your Way to Financial Freedom

Author - Van K. Tharp

Book Review

A masterpiece on trading that provides a complete overview of systematic trading techniques and strategies for any trader to succeed and continually improve upon his approach, learning and assimilating newer elements to achieve consistent results. The author presents a 17-step trading model for an average investor along with trading advice on avoiding common pitfalls and developing your trading methodology, which could provide the best possible results for any individual trader. The author addresses several important issues, including the reward to risk multiples, and offers guidance to help a trader personalize virtually any strategy and achieve better results. It also features interviews with top traders, which offers valuable insights for any trader. Plenty of practical examples are illustrated along with charts and relevant information to demonstrate how a particular strategy might work out—an indispensable guide for new and veteran traders.

Key Takeaways

This best book on stock trading is a complete guide to trading, which presents a detailed roadmap to success for traders of virtually any level of experience. The 17-step trading model propounded by the author makes life easier for novice traders, providing a guideline for going about it and ensuring the best results with minimal chances of failure. However, those who would love to get onto the daunting task of developing their trading strategy must diligently pursue this brilliantly written masterpiece.

#5 - Way of the Turtle:

The Secret Methods that Turned Ordinary People into Legendary Traders Hardcover

Author - Curtis Faith

Book Review

This best stock trading book is a masterpiece in its own right. It describes the details of a 25-year-long experiment in trading that helped the people involved discover unique strategies for successfully exploiting the hidden possibilities in markets and made them millions along the way. The revelations about the ‘way of the turtle,’ as they love to call it, are made by none other than the ace turtle, Curtis Faith. He lays bare the secret process they followed in selecting the ‘turtles’ and how they were trained to become masters of trading strategies in their capacity. It is nothing less than a fascinating journey into the world of trading on which readers might as well acquire some invaluable gems of trading and make their riches. A highly recommended read for traders prepared to make a concerted effort worth its reward.

Key Takeaways

'Way of the Turtle' is a revelation in and of itself about a few individuals out to conquer the trading world against all odds and how they did it with flair. It is a must-read for the trader who is not on a deadline to succeed but is prepared to invest time, intelligence, knowledge, and dedicated effort to reap the best rewards possible. In addition, this work offers a treasure trove of information on utilizing trading rules to go beyond the rules and devise successful long-term trading strategies based on the author's first-hand experience. What more could you ask?

#6 - Entries & Exits:

Visits to 16 Trading Rooms (Wiley Trading) Hardcover

Author - Alexander Elder

Book Review

In this excellent stock trading book, the author offers a rare peek into the trading rooms of 16 traders from entirely different molds, operating in different markets, and driven by different goals. Each one specializes in a particular type of trade and adopts varying techniques in keeping with their knowledge and experience. Contrary to what some readers might think, this work keeps the secret formulas for success a secret. But, far from that, essential qualities, including a disciplined and systematic approach, focus, and attention to detail, help them make it through. In addition, the work comes with a companion study guide that covers several vital areas, including psychology, markets, trading techniques, and case studies, lending additional practical value to the work. It is a highly recommended read for anyone looking for a realistic perspective on trading.

Key Takeaways

Successful traders rarely reveal how they work and what makes them good at it. Still, here professional lives of 16 traders are laid bare for readers to understand the intricacies and real-life challenges of the trading world. Those looking for some 'quick-fix' formula would do better to skip the work entirely because it focuses more on the qualities and outlook needed to succeed, along with the right tools and techniques. A companion study guide makes it a recommended read for practical traders of almost any level of experience and individual capabilities.

#7 - Algorithmic Trading:

Winning Strategies and Their Rationale (Wiley Trading)

Author - Ernie Chan

Book Review

This book is valuable work on quantitative stock trading. It offers beneficial practical information in a relatively easy-to-understand manner, which sets it apart from most others in the field. Keeping in mind how complex quantitative trading is, the author does an excellent job of taking readers through the entire process of developing and implementing algorithmic strategies and exploring the process's subtleties without making it difficult to understand at any point in time.

This relatively concise volume offers a goldmine of information to those looking to develop their systematic trading strategies. To add added value to the work, the author has also provided real examples that make it a worthwhile read.

Key Takeaways

This book is excellent on algorithmic trading, which covers the concepts and their application in coding, developing, and implementing successful trading strategies. What makes it such a valuable work is the ease with which such complex information is conveyed to the reader, which makes it possible to understand the principles and methods for developing personalized trading strategies for optimal results.

It is a highly recommended read for anyone interested in practical algorithmic trading without the kind of complex approach usually adopted. This a no-frills read on algorithmic laying threadbare the principles and practices of this art. What more could one ask for?

Also read: Reasons Why Bloggers Make Great Stock Traders