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According to Amazon, there are over 30,000 books on trading when you search for “stock trading books” on their website.
However, many of these books are an expensive business card for the author and little more than a vanity project. Additionally, the majority of trading books contain too much theory and few practical takeaways.
In this article, I will provide an overview and review the very best trading books available on the market today. This will ensure you read the right trading book for you, and more importantly, prevent you from wasting time.
The 10 best stock trading books in 2022
- Think & Trade Like a Champion
- Reminiscences of a Stock Operator
- The UK Trader’s Bible
- One Good Trade
- Unknown Stock Market Wizards
- The Art of Execution
- Flash Crash
- The Market Maker’s Edge
- The Sleuth Investor
- Short Selling
NOTE: I have distilled all the best learnings from the trading books included in this article (and more) into an actionable trading handbook. You can get the handbook for free by clicking the button below.
1. Think & Trade Like A Champion by Mark Minervini
It would be wrong not to list Think & Trade Like A Champion at number one. It’s a must-read for any stock trader, and it follows on from his excellent first book, Trade Like A Stock Market Wizard.
Mark Minervini follows specific trading patterns and his ideas are influenced by both Stan Weinstein and William O’Neil, authors of Stan Weinstein’s Secrets for Profiting in Bull and Bear Markets, and How To Make Money In Stocks respectively.
In fact, all four of these books should be read because they ingrain the concepts of risk management and trend following. These are notions that most traders learn the hard way, and it’s much cheaper to learn from others’ mistakes.
Much of my own trading is soaked in these four books and I have read (and re-read) these books several times.
2. Reminiscences of a Stock Operator by Edwin Lefevre
Reminiscences of a Stock Operator is a classic. Published in 1923, it is a fictionalised account mixed with fact-based on the life of Jesse Livermore. Jesse was a stock trader and speculator in the US market and racked up (and lost) fortunes several times. The book is worth its weight in gold for trading psychology and understanding human emotions.
“There is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.”
Sadly, Jesse’s mental health deteriorated. In 1940 he entered the Sherry Netherlands Hotel, drank two old fashioneds, and shot himself after losing his fortune for a third time.
3. The UK Trader’s Bible: The Complete Guide to Trading the UK Stock Market by Dominic Connolly
Dominic Connolly wrote The UK Trader’s Bible in 2005, and although it’s a little dated, I’ve included it because the book focuses on the one thing in trading that matters: what moves prices. The book uses real examples in long and short CFD trading and offers real insights into the mind of a successful trader.
Situations such as dual-listed arbitrage, bid opportunities, intraday news, rights issues, are all included. The UK Trader’s Bible contains a wealth of ideas and I would especially recommend this book for anyone interested in trading CFDs.
Additionally, it contains professional trading insights that a hedge fund would use. It is not the most basic of texts for retail traders, but a highly recommended read.
4. One Good Trade: Inside the Highly Competitive World of Proprietary Trading by Mike Bellafiore
One Good Trade is a proprietary trading book from Mike Bellafiore, founder of day trading firm SMB Capital in the US. Both prop traders and full-time traders see their income derived from their ability to consistently take money out of the market volatility through profits. It is mentally and emotionally challenging, but highly rewarding for those who succeed.
One Good Trade is an excellent read for those who are considering making the step to full-time trading and/or those wishing to take a more professional approach to trading both stocks and forex.
SMB Capital uses a mixture of both technical and fundamental analysis in order to make money and this is a thoroughly enjoyable trading book. Many profiles of successful and failed day traders are included, along with principles that we can learn from and apply for ourselves.
5. Unknown Stock Market Wizards: The Best Traders You’ve Never Heard Of by Jack Schwager
Jack Schwager is the author of the famous market wizards series that profiles top traders. He started off with Market Wizards (1989), before releasing The New Market Wizards (1992), and Stock Market Wizards (2001). All of these books deserve a place on any trader’s bookshelf, but with the final book being released 20 years ago, they’re beginning to decline in relevance.
The financial market is fast-paced, it changes, and those traders who don’t adapt are weeded out of existence. So I’m delighted that Jack has now released Unknown Market Wizards which highlights how traders today are making money in various ways.
This book series is inspiring as it shows what is possible if you’re willing to sit at the table and learn. Unknown Market Wizards includes a trader who turned just $2,500 into $50 million, and an advertising executive who achieved a 58% average return over a 27-year trading period.
Unknown Market Wizards is a great read and also covers the human side of trading – something that discretionary traders must deal with on a daily basis.
6. The Art of Execution: How the World’s Best Investors Get It Wrong and Still Make Millions by Lee Freeman-Shor
At the time of publication, Lee Freeman-Shor manages over $1 billion in high-alpha and multi-asset strategies. Lee has been ranked as one of the world’s top fund managers in 2012, and has produced a book of great importance.
The Art of Execution documents the findings of a period spanning seven years from June 2006 to October 2013, a period including the worst stock market crashes in living memory. 45 of the world’s top investors and their investment strategies were studied with all of their trades documented and analysed, and the book is the result of its findings.
As it turns out, the execution of strategy is far more important than the idea. Read my book summary for The Art of Execution for the findings.
The Art of Execution is a well-recommended book by many private investors and a necessary read for any investor wishing to improve their returns trading stocks.
7. Flash Crash: A Trading Savant, a Global Manhunt, and the Most Mysterious Market Crash in History by Liam Vaughan
Flash Crash is the tale of Navinder Singh Sarao who was able to create a fortune of $70 million trading financial markets from his bedroom at his parent’s house.
Nav was a trading prodigy who was one of the biggest players in the E-mini (a traded futures contract one-fifth of the side of a standard S&P futures contract) and when electronic traders started eating into his profits he built his own system to compete.
The FBI knocked on his door in 2015 – the book is an enjoyable and factual read of one of the most thrilling investigations in recent history.
Some see Nav as a folk-hero who fought back against Wall Street and high-frequency short term traders, whereas others believe he cheated. Read the book and decide for yourself.
8. The Market Maker’s Edge: A Wall Street Insider Reveals How To: Time Entry and Exit Points for Minimum Risk, Maximum Profit; Combine Fundamental and Technical Analysis; Control Your Trading Environment Every Day, Every Trade by Josh Lukeman
Josh Lukeman was an institutional market maker who concentrated on technology stocks. This book was published in 2000 so it’s antiquated, but the content is timeless. It also wins the award for the longest title of a book I’ve ever seen.
The Market Maker’s Edge covers a solid grounding in risk management, including practical tips on position sizing, candlestick and chart patterns, cutting losses, and managing your mindset. It also covers fundamental and technical setups to trade, some of which still work today.
One excellent part of the book is the emphasis on taking responsibility for your results. Regardless of your trading success, it is down to you and nobody else. Victims blame others; winners take responsibility and hold themselves accountable. Various emotions and how to deal with them are covered, such as anxiety, greed, regret, and underconfidence.
I originally bought The Market Maker’s Edge because I thought it would give me insights into the SETSqx platform on the London Stock Exchange. It didn’t. However, I found this book useful and would recommend it for anyone wanting to learn more about trading. You can read my summary here.
9. The Sleuth Investor: Uncover the Best Stocks Before They Make Their Move by Avner Mandelman
It’s quite possible this book appealed to me because I studied History at university. The author believes an edge can be gained by speaking to company employees, using scuttlebutt, talking to suppliers, and in some extreme cases even carrying out surveillance on business activities.
One example used in The Sleuth Investor is a mining company that was highly profitable. Yet when Avner visited the local mine, he found people unwilling to talk to him, and eventually found out the entire company was fraudulent. He said nothing to anyone, shorted the stock, and waited for the eventual collapse.
The Sleuth Investor’s main thesis is that the Efficient Market Hypothesis (EMH) is not always correct. EMH may work in general, and for large stocks, but alpha can be generated by those willing to dig deep and do some work.
It’s an entertaining book and an easy read, so it definitely earns a spot on the top 10 trading books.
10. Short Selling by Amit Kumar
Books on short selling are rare. Great books on short selling are even rarer. Short Selling is a complete text in both the fundamentals and market mechanics of a short – the latter being necessary to understand before one opens a short position.
The Short Selling book looks at ideal stocks to short, as well as risks, and the perils of shorting expensive stocks. Charting is a necessary skill when shorting.
Shorting is an advanced trading strategy and one most retail traders lose when trading, but understanding how shorting works and the stocks shorters target can make one a more effective trader and investor.
What is the best book for learning trading?
There is no single definitive “best book” for learning trading. There are various types of trading and one book is not the best fit for all.
It would be like asking “what is the best car?” Many would be tempted to say Lamborghini or Ferrari, but these cars are useless if you’re wanting to drive off-road.
This is why someone who wants to scalp will get little use from a swing trading book, and vice versa.
This list compiles 10 books that cover a variety of trading disciplines and each one of them will help you on your trading journey.
Can I learn trading from books?
Yes, you can. You can learn the theory of trading and you can learn much from reading about trading greats and their trading methodologies.
But to truly learn and understand trading, you need to apply your knowledge in the market with real money and start actively trading. Books will teach you so much but doing will teach you so much more.
What is the number 1 rule in trading?
The number 1 rule in trading is cut your losses.
Most traders blow their accounts because of too big a position size and unexpected volatility. These result in large losses and kill trading accounts before the traders have had a chance to allow their edge to play out.
If you can’t cut your losses, you’ll fail in trading. Sorry, but that’s how it is.
Conclusion
We’ve come to the end of the top 10 best stock trading books (although not all of these are best sellers). There are many great books on trading that are not on this list and yet to be published. But if you want a free trading handbook on the UK stock market, you can download mine below.
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Enter your email to receive my free UK stock trading handbook, packed with professional techniques to manage risk and consistently profit on AIM stocks.
If you’re interested in forex trading and cryptocurrency then the trading psychology books are more than suitable for you.
Honorary recommendations
- Trade Your Way To Financial Freedom by Dr Van Tharp
- Japenese Candlestick Charting Techniques by Steve Nison (world’s most expensive book?)
- One Up On Wall Street by Peter Lynch
- Technical Analysis of the Financial Markets by John Murphy
- Pit Bull by Martin Schwartz
- The Intelligent Investor by Benjamin Graham (the father of value investing)
- Trading In The Zone by Mark Douglas
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