Books play an important role in improving your skills in so many areas. For example, doctors need to read books on existing and emerging topics to succeed. Similarly, teachers need to take refresher courses on their areas of expertise.
In the same manner, traders need to read books, articles, and even watch videos. By so doing, traders will be in a good position to learn new skills and improve their strategies.
This approach applies to anyone, whether you're just beginning to approach the world of trading now or you're an experienced trader. That's why the list we will present below is a bit of a mix of evergreen titles that should be read at least once in a lifetime.
Trading Commodities and Financial Futures | George Kleinman
Commodities and their respective futures are important part of the financial market. For example, crude oil tends to have an impact on the general stock market and the respective oil stocks. Similarly, gold tends to react to monetary policy issues while palladium and platinum are signs of the automobile industry.
Therefore, this book will help you understand how the futures and options market works. It also covers how to conduct an in-depth analysis on commodities and how to find support and resistance levels. As such, this book will give you a primer of how you can even trade other types of futures.
» Related: What to watch when trading commodities
The Trader’s Guide to Key Economic Indicators | Richard Yamarone
Richard was a leading - and respected - economist who is still remembered for his work and opinions. A few years ago, he wrote this book, with the goal of opening traders’ eyes on fundamental analysis. Precisely, he focuses on the key economic numbers in the market and how you can use them to trade.
Some of the numbers he looks at are GDP, leading, lagging, and coincident indicators, employment index, manufacturers indices, and housing, among others.
This is an important book for traders of all types. It can be used by forex, commodities, stocks, and ETF traders who want to understand the history and importance of these numbers.
Volume Price Analysis | Anna Couling
The concept of volume is an important one in the financial market. In most cases, a rally that is not supported by volume will always falter. You can also use volume to identify pump and dump schemes and to identify when a breakout has happened.
Indeed, we have also written about some of the top volume indicators like the money flow index (MFI) and volume.
While many books on volume exists, we believe that this one by Anna Couling is one of the best. In it, she explains the importance of volume and then looks at its principles. She also looks at the Volume at Price (VAP) concept, dynamic trends and trendlines, and the concept of support and resistance.
This book is ideal both for beginners and experienced traders across all assets.
Derivatives Markets and Analysis | Stafford Johnson
The derivatives market is one of the least understood one on the market. Besides, most ordinary traders don’t focus on it. Instead, they focus on the real items like shares and currencies. Still, derivatives are an essential part of the market and are used mostly by advanced traders.
This book is an excellent piece that is written in a simple-to-understand language. In it, Swafford writes about the futures market and focuses on the currency, equity index, interest rates, bond futures, and forward contracts.
In the next chapter, he looks at the options markets and strategies. One of the strategies he looks at are options hedging of these derivatives.
He then covers options pricing models like the binomial and Black-Scholes pricing models. He concludes the book by looking at financial swaps like interest rates, credit, and currency swaps. This is a great book for both beginners and advanced traders.
Mastering Market Cycles | Howard Marks
Howard Marks is a billionaire investor with a net worth of more than $2.2 billion. He made his fortune by founding OakTree Capital Management, a company with more than $155 billion in assets under management. It is known as the biggest investor of distressed securities. Therefore, Marks is a well-known figure who has gained perspectives in his decades in the industry.
In this book, he writes about market cycles in the financial market and why understanding them is important.
He first looks at economic, earnings, distressed debt cycles, credit cycles, and the regularity of cycles. Later on, he writes about how to cope with market cycles and how to deal with them.
This book is ideal for both traders and investors who want to understand the state of the financial market.
Black Edge | Sheelah Kolhatkar
As a trader, learning from the experiences of other people will go a long way in helping you avoid the same mistakes. Black Edge is one of those books that will help traders avoid making mistakes, especially those about the law. This is the most comprehensive book on Steve Cohen, one of the best-known hedge fund managers in the world.
Before starting Point 72, Steve ran SAC Capital, a firm that had billions in assets under management. He was forced to shutter the fund after he was accused of insider trading. He also paid nearly $2 billion in fine and was banned from investing external funds for years.
This is an excellent book for traders who want to know more about the inner workings of hedge funds.
Trading for a living | Alexander Elder
Alexander Elder is one of the leading trading analysts in the market. He is also well-known for his many books on the financial market. One of his best books is known as Trading for a Living. In it, he describes some of the key concepts in the financial market.
He starts the book by looking at individual psychology and mass psychology. Later on, he looks at classical chart analysis patterns followed by computerized technical analysis procedures. He also dedicates a full chapter on the neglected essentials like volume, open interest, time, and Herrick Payoff Index.
This is a great book that is mostly recommended for beginners. Experienced traders will find some of these concepts to be a bit repetitive. We also recommend that you read his other book known as Come Into my Trading Room.
Day Trading & Swing Trading the Currency Market | Kathy Lien
Kathy Lien is a leading opinion writer in the currencies market. She currently contributed in key publications like Investing.com. She is also a popular figure in financial media.
In Day Trading & Swing Trading the Currency Market, Lien covers almost all topics that forex traders should be aware about.
She starts with the foundation of the forex market and then moves to the historical context of the industry. Next, she covers what moves currency pairs in the long, short, and medium. Other concepts in the book are on fundamental and technical analysis.
Japanese Candlestick Charting Techniques | Steve Nison
Candlestick analysis is the process of analyzing several chart patterns. In the past, we have looked at what candlesticks are and some of the popular types of these patterns. Some of them are:
- Hanging man
- Bullish and bearish engulfing
- Three white soldiers.
Our articles on these patterns have always been short. Therefore, we recommend that you read this book by Steve Nison. In it, he starts by looking at the history of candlesticks and how to build them. He also looks at the various types of these patterns, including reversals and continuation patterns.
Later on, he writes about how to use these patterns with indicators like the RSI and moving average. Finally, he writes about advanced chart types like Renko and point and figure.
The Hand Book of Fixed Income Securities | Frank Fabozzi
Fixed-income assets like bonds and mortgage-backed securities are some of the least covered assets. Yet, they are the biggest asset class. In fact, the volume of bonds in the world is bigger than that of equities.
Therefore, if you want to be a good fixed income trader, this book will guide you on how to do it.
In it, Fabozzi starts by explaining what fixed asset is and moves to write about the structure of interest rates. He also looks at forward rate analysis and types of fixed income like treasuries, municipal bonds, and private money markets.
Day Trading for Dummies | Ann Logue
For Dummies is a company that focuses on explaining complex concepts in an easy-to-understand manner. In this book, Ann writes about day trading and how the market works.
She then writes about the various types of assets in the market like stocks, bonds, currencies, commodities, ETFs, cryptocurrencies, and derivatives. In the next chapters, she writes about the various approaches to trade and some of the popular maxims in the market.
» Related: Start with the basics of day trading
Books, whatever their format, are one of the best sources for learning or taking cues from other people. As mentioned in trading, and in the world of investments in general, reading, updating and comparing one's point of view with those of others is absolutely positive and can offer many ideas for growth.
We hope that this selection will help you, regardless of your skills. Who knows that approaching one of these books, even in your spare time, might not give you a turning point in your career.
If you have any other suggestions, feel free to leave them in the comments. We may include them with future updates!
External Useful Resources
- A small list of free day trading books - Swing Trade Stocks