10 Best Stock Trading Books For Beginners To Start Reading This 2020

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The best stock trading books for beginners are the ones that come from authors who made a name for themselves in the financial market, well, in my opinion, or at least the ones that I tend to look for. Their books come with their own systems, reasoning, logic, and personal experience.

There are tons of trading books out there wherein they are only created for the sole purpose of making a sale. These authors don’t really help the newbies in the industry, they’re just in it to make money off their books!

I’m pretty sure we’ve all seen a few being advertised but unfortunately, they are with no real value.

Luckily for you, I’m here hoping to guide you on the best stock trading books for beginners! If you’re ready to learn more about the industry, then let’s get right to it! 🙂

 

10 Best Stock Trading Books For Beginners To Start Reading This 2020

10 Best Stock Trading Books For Beginners To Start Reading This 2020.

 

Back when I started learning about the trading industry, there were so many books and information available to the public. It can really be overwhelming because it’s confusing on which book should you begin with.

I didn’t want to read a book and spend hours on it to only find out that the author has just been writing general information that I could just find on the internet. 

I’m pretty sure you wouldn’t want that too.

And so, I wouldn’t let that happen to you in this post.

I’ve done the research for you and spent hours reading several books. And the ones listed below are the books that really helped me learn more about trading and the different principles that surround it.

But before we get into book recommendations, let’s have a short discussion on what to expect in these books…

Most traders in the stock market don’t read financial statements, study the company’s value, or looking at who’s running the business. Their main point of reference when they make a trading decision is the stock chart of a company. 

Yes, the ones that you see with the red and green bars. Like this one:

Reading stock charts and basing your decision off that analysis is the discipline of Technical Analysis. Technical Analysis is a method of forecasting the direction of the price through the study of past market data. 

There are two main components that traders look at when they see a chart;
1. Price
2. Volume

Now the topic of technical analysis is broad and runs deep. So instead of talking about it here, I recommend you read my beginner’s post – Technical Analysis Explained – Stock Market 101 Guide For Beginners

I wanted to write a brief introduction first about technical analysis and the study of charts because you’ll learn a ton about this topic when you start reading the books below. Don’t worry if you have zero knowledge on the topic yet, read the number 1 book first then you’re good to go to read the rest!

 

1. Technical Analysis Of Stock Trends 

Hardcover: $85.00
Where to buy: Amazon
Rating: 4.4 out of 5 stars

This book is considered by many technicians as the BIBLE of technical analysis.

What I see newbies do wrong is that they go for complex books even though they don’t have the right foundation of reading and understanding charts yet.

Technical Analysis Of Stock Trends teaches the basics of the discipline.

This is where most trading systems originated. The book teaches a methodology for analyzing the predictable behavior of market participants and the market in general.

It’s better to start with this book so that when you see the chart examples on the other ones, you’ll be able to read it and understand it better.

Plus the authors here wrote the reasons and logic behind different famous trading concepts and ideas. Which is important so that the newbie will be educated on why he or she is following it.

That’s the reason why this is a good introduction to trading because it covers in detail the different factors you need to see and understand when reading a chart.

Currently on its 12th edition, traders and investors alike still reference this book from time and time again!

 

2. Think And Trade Like A Champion

Hardcover: $30.00
Kindle: $28.00
Where to buy: Amazon
Rating: 4.8 out of 5 stars

Mark Minervini is a well-known trader in the financial markets. He’s part of Jack Schwager’s list of market wizards. Mark has been a trader for decades already and has won the US Investing Championship back in 1997. He had a 155% annual return which is double the second placer of that competition.

This book of his is recommended by many because Mark explained his trading systems and philosophies in this book. A lot of traders want to pick his brain out on how he approaches the market because of his superb performance yearly.

And in this book, he doesn’t hold back on giving tips on what you need to do to perform well in the market. He teaches you what to do in every possible scenario.

But the book doesn’t just stop on strategies, it also discusses habits, routines, and different pitfalls that traders should avoid. It’s a great beginner’s book to read because it teaches you the principles and expectations to have when you’re starting to trade.

Mark has a ton of following in the trading world because a lot of market participants do value his opinion. You can check out his chart analysis and tweets about the market here!

 

3. How To Trade In Stocks

Hardcover: $100.00
Kindle: $3.00
Paperback: $8.00
Where to buy: Amazon
Rating: 4.5 out of 5 stars

This book is written by Jesse Livermore – who is considered by many as the best trader that ever lived.

Today’s famous and most successful money managers say that the late Jesse Livermore is one of their heroes and has served as an inspiration for them.

Jesse Livermore has probably gone through every emotional and psychological challenge that a trader would go through in a lifetime. He has made a fortune then lost it. But was able to create wealth again but lost it all again before committing suicide.

The book teaches you how to read market and stock behaviors and how history will always repeat itself.

It also shows how Jesse analyzed the leaders in the market and how he capitalized on their growth. When it comes to trading the market, it also involves a lot of market timing and money management. Which both things are taught in this book as well.

Jesse Livermore is considered a legend by many. He has made and lost four market fortunes in the span of 40 years. His techniques and market timing systems stood the test of time and are still applicable in this era. Know more about his trading system in this book!

 

4. The Art And Science Of Technical Analysis

Hardcover: $56.00
Kindle: $50.00
Where to buy: Amazon
Rating: 4.6 out of 5 stars

After you’ve read some introductions on technical analysis and got different ideas and principles, it’s time to go deeper.

Technical analysis isn’t just about reading charts and candlesticks.

It’s also about interpreting what’s happening behind the charts and the emotions of market participants.

The book talks about the psychology of market movement and structure that’s shown in a stock chart. It explains why a chart pattern is considered a negative sign and why the other patterns show optimism in the market.

This is unlike any other trading books that just tell you what pattern to look out for without explaining why you should find it.

It can be a long read since a single topic about the market can go on for several pages. But what’s nice about it is that the author doesn’t reuse every information from the last chapter, he always provides something new. So if you want to take your trading to the next level, this book is a good first step!

 

5. Market Wizards

Market Wizards: Interviews with Top Traders by [Jack D. Schwager]

Hardcover: $43.00
Kindle: $15.00
Paperback: $21.00
Where to buy: Amazon
Rating: 4.6 out of 5 stars

I’ve also recommended this book for the newbies who are looking to invest in the market. This an excellent book for traders as well because Jack interviews the most successful personalities in the financial market.

And some of the “wizards” in the book are people who use technical analysis first and fundamental analysis second.

This book gives you an overview of what successful traders did for them to reach their current status. And an important lesson that you’ll pick up here is that there’s not one system that always works in the market, there’s no holy grail.

It’s important to know that fact especially when you’re starting out because you might think that there’s only one trading system that makes money.

It’s always nice to pick the brains of people who have made it in their industry and this book provides that for you! You’ll learn about their failures and their mistakes when they were still starting out. With that information, you will be more cautious and alert on the lookout for those trading pitfalls.

 

6. Trading In The Zone

Hardcover: $39.00
Kindle: $15.00
Where to buy: Amazon
Rating: 4.6 out of 5 stars

The author here believes that in order to be successful in the market, your state of mind is the key to it all. This book talks about the psychology aspect of trading. Which is an undervalued topic when it comes to trading and investing.

The difference between people who made money versus the ones who lost money isn’t on their systems and strategies…

..it’s their mindset.

People who have made money knows when to sell a stock to stop the losses immediately, the people who lose money just hope and pray for the stock price to come back up.

Mark Douglas did a great job of writing and making readers understand that it’s not the market versus the trader. It’s the trader versus himself. The market is a separate entity that does what it wants and it’s not against you.

This book is great for a beginner because it talks about what mindset you should have before you participate in the stock market.

 

7. One Good Trade

Hardcover: $38.00
Kindle: $35.00
Where to buy: Amazon
Rating: 4.5 out of 5 stars

Mike Bellafiore is the co-founder of SMB Capital which is a proprietary trading firm in New York City. The firm has been recognized by many for its outstanding intraday equities training program.

This is an excellent book for people who are aspiring to be intraday traders or day traders. These are the traders that just buy and sell stocks of a company within the trading day. They don’t let a day pass by because they’re only in it to make quick money and get out before the stock goes down.

In this book, Mike was very generous in providing information and ideas to readers. He also shared that you need to be “elite” for you to make money day in and day out in the market and he teaches how the readers can attain that.

If you want to learn how to be a successful day trader, this book is for you. Mike is the perfect author for this topic because he walks the talk. He runs a prop firm that’s profitable while also teaching his traders how to make money for the company.

 

8. How I Made $2 Million In The Stock Market

Hardcover: $15.00
Kindle: $1.00
Paperback: $5.00
Where to buy: Amazon
Rating: 4.5 out of 5 stars

If you’re a beginner but already did a little bit of study on how to become a trader, this a good book for you. Nicolas Darvas is a self-taught investor, author, and dancer. He was a dancer who made a fortune in the stock market on the side.

It’s a nice book to read because Nicolas wrote the ups and downs of his trading career. He mentioned that when he first started, he made mistakes, struggled, and lost money. But as you read the book, you’ll learn how he never let those failures stop him.

He created his own trading system and eventually found success!

His system called the Darvas Box System was created in the mid 1900’s and is still used today by many traders globally!

In his book, he wrote the details of that same system that made him a fortune in the market. Which you too can follow! The life of Nicolas Darvas was every trader’s dream – traveling the world while making money on the stock market.

 

9. The New Trading For A Living

Hardcover: $48.00 – $63.00
Kindle: $43.00
Where to buy: Amazon
Rating: 4.6 out of 5 stars

This book has the complete package – it talks about psychology, trading tactics, and money management.

It’s a comprehensive guide on how to be a trader in different markets. Dr. Alexander Elder has subdivided the book into those three sections above.  Which is a very smart move since he talks about psychology first before anything else.

If one of those three components is missing, the trading system or the trader himself is incomplete. He will constantly find loopholes in his trading strategies which will make him jump from one system to the other.

What I love about this book is that Dr Alexander really gives weight to psychology and risk management. Most people lose money because they don’t have risk management in their system. They just bet the whole house and when the stock turned the other way, they were stunned were not able to stop the losses immediately.

This book has become a staple when it comes to the best trading books out there. The lessons learned here works for both newbies and seasoned traders!

 

10. Japanese Candlestick Charting Techniques

Hardcover: $37.00 – $39.00
Kindle: $13.00
Where to buy: Amazon
Rating: 4.6 out of 5 stars

If you’re an aspiring trader, then most often than not, you’ll be using the stock chart as your reference on whether you should buy or sell a stock. And usually, these stock charts are using Japanese candlesticks to determine the price movement.

Since you’re going to be looking at those things, then it’s a wise decision to learn more about these Japanese candlesticks.

What you’ll learn here is sometimes overlooked by many traders. What they don’t realize that each candlestick represents the emotions of the investors and traders involved.

These emotions are what pushes and pull the price in the stock chart so it’s very important that you understand it. Some trading books don’t explain how to read a candlestick, they just show you a chart immediately and leave you guessing. So if you want to understand the different candlesticks and the different patterns that it forms, this book is a great resource for that!

 

Application Of Learning

Honestly, you can’t fully learn what it’s like to trade just by reading books.

In this field, the experience will always be the best teacher.

The only reason why these authors create such good content is that they’ve experienced the losses, the gains, and the emotional rollercoaster themselves!

The successful trading authors have tons of experiences under their belt. Some have been trading for decades already. Most of the authors above even traded before the trading softwares were made!

They were manually drawing the charts themselves. Even though they were the ones doing that, they still managed to earn a ton of money in the market!

But now that you’ve read their books, you’ve learned about their systems, and you’ve identified the common pitfalls that newbies make, it’s time for you to apply what you’ve learned!

It might be scary at first when you trade with your own hard-earned money but you need to accept the fact that you will lose money in this venture. But obviously, you can gain a lot as well!

So for beginners, start small!

Start with money that you can afford to lose! Dip your toes in the market and soak in the emotions that you feel. Again, experience will be your best teacher!

Read More Related Articles:

 

Best Investing Books For Beginners

The reason why I tell beginners to read a book first before trading the market is because they only pay X amount of dollars and they get decades of experience by the author.

At least when you start trading, you have knowledge about what are the right things to do compared to going into the market blindly.

Rather than losing money on trading blindly, why not invest in yourself first. Learn the ropes and tips of market professionals. Read how they became successful and overcome the challenges that they’ve encountered along the way.

So which book are you planning to read first? Have you read some of the books above? I’d love to hear your opinions below! 😀

 

 

 

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