Commercial psychology is as important as developing a strong business strategy. Without the mental strength to stick to the plan, even the best strategy in the world will be futile. Therefore, good traders work on developing and improving their strategies, as well as becoming more aware of their personal qualities (such as discipline and patience) and working to enhance them, allowing them to be more effective in executing their strategies.
Trading in the Zone
This book, authored by Mark Douglas, is considered a necessary read for anyone struggling with market instability. The author provides a roadmap to overcoming many trading problems. The book discusses the shortcuts people often resort to, how they are influenced by fear and greed, and how they allow something to distract them from their goals. These challenges often lead traders to act irrationally, even when they know better. The book explains why and how these problems occur and how to deal with them to prevent them, in a simple manner. If you want to understand commercial psychology, you should first work on understanding trading practices, techniques, and terminology before reading this book, so you can fully grasp the topics. “The Disciplined Trader” is another popular trading book by the same author.
Reminiscences of a Stock Operator
Classic books can maintain their value across generations. This book was first published in 1923 and is authored by Edwin Lefèvre, based on the legendary stock trader Jesse Livermore. The book combines rich storytelling with deep thinking about what it takes to trade successfully (and the actions that can destroy a trader). You can read the book over and over, and you will always find new insights with each reading. This book has something for all traders. Even if you are already achieving positive results or not trading well, you can learn something new. If you’re starting your trading journey, this book should be on your “must-read” list. In this book, you will follow the trading career of a lifelong trader, the experiences that may provide the inspiration you need to help you overcome challenges you face or have yet to encounter.
Predictably Irrational: The Hidden Forces That Shape Our Decisions
Authored by Dan Ariely, this book is rare in its ability to be engaging within the non-fiction genre. It addresses problems that traders are aware of but seem incapable of preventing. This includes why it is difficult to exit a losing trade and delves into why people remain in bad relationships. The book explores issues that traders often do not recognize. It dives into how risk and uncertainty affect the decision-making process and how both relate when facing market risks. The material also discusses concepts such as diagnostic bias – the inability to see beyond an initial hypothesis despite evidence supporting otherwise. They also discuss the impact of labeling – a person’s character habitually gaining attributes assigned to them. All these habits can significantly affect traders. The research and stories presented in this book can also educate the reader about the hidden drivers behind the decision-making process. In turn, this knowledge may help you make more informed decisions as a trader.
The Art of Thinking Clearly
Authored by Rolf Dobelli, this book presents its content concisely across 99 chapters, each consisting of only two to three pages. The chapters provide examples of psychological traps that anyone can fall into – not just traders. With 99 traps discussed in the book for awareness, many readers will learn something about the choices that can hinder their development and growth. Some chapters include: “How to Liberate People from Their Millions”, “Kill Your Beloved Ideas”, “Don’t Take News Anchors Seriously”, “Why Watching and Waiting is Torture”.
Market Wizards
The Market
Reading the Market Wizards series by Jack Schwager is well worth the time invested. Each book uses an interview format with top traders. This makes it incredibly useful and provides you with insights into how each trader approaches the markets. You’ll also read about the challenges each trader has overcome.
Investor’s Rate
Easy to read and filled with vital information, Jake Bernstein offers a complete guide on why many traders fail due to their psychology. He reveals the common issues faced by most traders, then follows up with tactics and strategies to deal with those issues.
Frequently Asked Questions (FAQs)
How can you improve your trading psychology? You can improve your trading psychology through discipline and self-awareness. Keeping a journal and engaging in internal dialogue can help you track your thoughts and ensure you stick to your trading plan.
What are the best books about the stock market? Some of the best books about the stock market include “The Intelligent Investor” by Benjamin Graham, “The Beginner’s Guide to the Stock Market” by Matthew Kratter, and “How to Make Money in Stocks” by William O’Neil.
What are the best books on options trading? Some of the best books on options trading include “The Options Trading Course” by Frank Richmond, “Options Made Easy” by Guy Cohen, and “Options as a Strategic Investment” by Lawrence McMillan.
Was this page helpful? Thank you for your feedback! Let us know why!
Source: https://www.thebalancemoney.com/essential-trading-psychology-books-1031445
}
.lwrp .lwrp-list-item img{
max-width: 100%;
height: auto;
object-fit: cover;
aspect-ratio: 1 / 1;
}
.lwrp .lwrp-list-item.lwrp-empty-list-item{
background: initial !important;
}
.lwrp .lwrp-list-item .lwrp-list-link .lwrp-list-link-title-text,
.lwrp .lwrp-list-item .lwrp-list-no-posts-message{
}@media screen and (max-width: 480px) {
.lwrp.link-whisper-related-posts{
}
.lwrp .lwrp-title{
}.lwrp .lwrp-description{
}
.lwrp .lwrp-list-multi-container{
flex-direction: column;
}
.lwrp .lwrp-list-multi-container ul.lwrp-list{
margin-top: 0px;
margin-bottom: 0px;
padding-top: 0px;
padding-bottom: 0px;
}
.lwrp .lwrp-list-double,
.lwrp .lwrp-list-triple{
width: 100%;
}
.lwrp .lwrp-list-row-container{
justify-content: initial;
flex-direction: column;
}
.lwrp .lwrp-list-row-container .lwrp-list-item{
width: 100%;
}
.lwrp .lwrp-list-item:not(.lwrp-no-posts-message-item){
}
.lwrp .lwrp-list-item .lwrp-list-link .lwrp-list-link-title-text,
.lwrp .lwrp-list-item .lwrp-list-no-posts-message{
};
}
Leave a Reply