Forex trading, or any type of trading for that matter, isn’t a simple discipline. Sure, you can get to the pro level, where every trade you make seems like a stroke of genius, but it will take most of us many long years of trial and error, leaving aside all the time we’ll have taken learning the technical basics of the industry.
With that in mind, it might seem like books on the psychology of trading might be frivolous, barely useful affectations for those with a little too much time on their hands, but nothing could be further from the truth. We need every bit of edge we can get in the trading world, especially now that access to information and technological trading tools has been more or less leveled across the field of competition.
Let’s take a quick glimpse through some of the volumes on trading pyschology that have proven themselves useful to thousands of traders across the world. We don’t think there’s any magic bullet in the trading industry, but perhaps there might just be a spark of trading wisdom buried within the pages of one of them that takes your trading endeavors to the next level.
Trading in the Zone
Mark Douglas delves into the sphere of positive thinking and how we may translate the habit into trading success. With such concepts as how we may convert the negative energy that stems from fear of trading losses into a positive drive to success, Douglas delivers what many consider one of the most credible books on trading psychology, regardless of the fact that he didn’t have the benefit of any formal training in psychology.
The Disciplined Trader
Douglas comes in for a second appearance on this list – yes, he’s that good. With a take on trading psychology that seems to resonate with a vast base of traders, he never lacks something useful to say to the industry.
Here, Douglas delves into the concept of probabilistic thinking as applied in the trading world. With every trader’s familiarity with the concept of probability and just how important a factor it may be when it comes to their field, you can bet that there’s something useful for every trader within these pages.
The Daily Trading Coach: 101 Lessons for Becoming your own Trading psychologist
For those out there who would like to stop reading books on trading psychology (or paying to see one) and become their own trading psychologist, Brett N. Steenbager provides us with a volume that helps us achieve just that. The thrust of the book strongly stresses the power of reinforcement taken as a daily regime. He tells us o the importance of taking the time each day to go over our trading activities, and figuring out how to be better with each passing day if we’re ever to reach the optimal performance levels we hope for.
12 Habitudes of Highly Successful Traders
To paraphrase Aristotle, widely considered to be the father of classical psychology, excellence isn’t an act, but a habit, since who we are is essentially a sum of what we repeatedly do. Ruth Barrons Roosevelt takes us on a journey illuminating this truism, with a focus on trading and the type of habits we should strive to develop if trading success is our goal. Rather than simply give us a list of good shares to buy, the book tells us how to make spotting good trades a habit that comes as naturally to us as breathing.
The Way of the Warrior-Trader: The Financial Risk-taker’s Guide to Samurai Courage, Confidence, and Discipline
Despite the rather ambitious title, Richard McCall manages to give us a solid volume of trading advice here. He strives to give us pointers on how we can prime our minds to face the fear of taking risks with the aid of a six-step plan loosely based on the samurai code (bushido). The parallels between trading, war, and life in general are as numerous as they are obvious, and McCall manages to bring out the wisdom in the comparisons well here.
Hedge Fund Market Wizards: How Winning Traders Win
Jack D. Schwager takes us on a tour of the much-maligned – but still greatly envied – world of high-flying hedge fund superstars. With examples and lessons drawn from interviews with legends such as Ray Dallo and Joel Greenblatt, Schwager gives us a unique peek into the mind of the successful trader, with object pointers on how we too may achieve their levels of aptitude.