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Best Trading Books to Read That You Can Apply in Your Forex Trading

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Best Trading Books to Read That You Can Apply in Your Forex Trading

In the simple words of Dr. Seuss, the more you read, the more things you’ll know. To even the most knowledgeable people, forex remains one of the fascinating endeavors for making profits and building wealth.

Luckily, there is no shortage of great bodies of work authored by some of the smartest and most influential minds globally. Amazingly, while many of the books here are well over a decade old, they are still as relevant as when they were published.

Each section will briefly detail what the book is about, the synopsis, and which type of people it is suitable for.

‘Market Wizards: Interviews with the Top Traders’ (1989) by Jack Schwager

What is the book mainly about: interviews with the top traders of the 70s and 80s detailing stories of their success and failures.

Book cover of ‘Market Wizards’

We can attribute many of today’s quotes by legendary multi-millionaire traders like Bruce Kovner, Ed Seykota, Paul Tudor Jones, Stanley Druckenmiller, George Soros, and more from this outstanding publication written by Jack Schwager, a futures trading expert and prolific author.

This highly readable book was released in 1989 with several follow-up publications in the same style. Market Wizards is brilliant since the author interviews successful, high-net-worth traders from all walks of life trading a variety of different instruments like futures, equities, commodities, etc.

Although learning about successes is awe-inspiring, all the traders are quite candid about their failures and how the reader can learn from them.

Best for: It’s an excellent book if you’re interested in diving into the thoughts of the oldest traders from nearly all financial markets, whether you’re a total beginner or advanced.

‘Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude’ (2000) by Mark Douglas

What is the book mainly about: trading psychology and dealing with probabilities in the markets.

Book cover of ‘Trading in the Zone’

‘Trading in the Zone’ is one of the most revered psychology-focused trading books out there, a body of work that’s seen as a biblical blueprint by many. 

It was written by the late Mark Douglas, an in-demand trading psychology coach and author with prior financial experience in floor trading and working with hedge funds in the 70s.

The book was released on April Fool’s Day in 2000. When most traders think of trading psychology, they are quick to quote Douglas. Although it’s easy to assume psychology is about dealing with emotions, the book covers much more than this.

At its core, Douglas aims to build a framework of consistent trading for readers to identify and eradicate several mental traps costing traders money. 

The author emphasizes little on the technicalities of trading but more on dealing with the randomness of the markets, being comfortable with the realities of financial risk, and treating any financial instrument as a probabilistic arena than a game of absolutes.

Best for: Although the book is not technical, it’s better to have some trading experience to get the best out of ‘Trading In The Zone.’ Of course, if you have any interest in trading psychology, this book is typically one of the most recommended.

‘Time Compression Trading: Exploiting Multiple Time Frames In Zero-Sum Markets’ (2010) by Jason Alan Jankovsky

What is the book mainly about: concepts relating to zero-sum markets.

‘Time Compression Trading’ is easily one of the more complex books to read and clearly targets astute, advanced traders. Yet, it’s written eloquently and interestingly without being overly complicated.

Book cover of ‘Time Compression Trading’

This is primarily because the author, Jason Alan Jankovsky, references the similarities between ordinary markets and those we trade. Jankovsky is a forex, futures, and options veteran with more than three decades of involvement on both sides of the fence; retail trading and owning a brokerage.

So, what is the main idea behind this book? If you’ve never heard of zero-sum markets, ‘Time Compression Trading’ is one of the publications exploring this premise in depth. It uses this ideology and other intricate concepts to reinforce how market psychology rather than technical indicators drive the price movements we see.

Essentially, ‘Time Compression Trading’ attempts to strip down the structure of any financial market to its barebones by exploring the inherent drivers.

Best for: ‘Time Compression Trading’ is really for advanced traders with a few years of experience since the concepts discussed are rather complex yet quite insightful. 

‘Trading for a Living: Psychology, Trading Tactics’ (1993) by Dr. Alexander Elder

What is the book mainly about: building a skeleton for the three pillars of profitable trading; mind, method, and money skills.

Book cover of ‘Trading for a Living’

‘Trading for a Living’ is a practical book for any trader serious about trading for a living. While it’s a lengthy 289-page read, it does a sufficient job exploring all the concepts in its title to the broadest. Dr. Alexander Elder is, first and foremost, a psychiatrist but also a professional trader and teacher. 

Throughout your reading, you will realize how the book stays true to its three primary themes of psychology, trading tactics, and money management, which Elder dubs as the ‘three Ms’ (mind, method, and money).

What’s excellent is that the author thoroughly covers much ground in each concept. For the mind, readers will learn how to be more disciplined and avoid unnecessary emotions. Regarding the method, the book explores in ample detail the tactics of finding trades and probes all the popular technical analysis tools we still use today. 

Lastly, the money aspect should show readers how best to manage their trading account through solid money management skills.

Best for: This book is applicable for all experience levels of traders.

Final word

Of course, this article only scratches the surface of the numerous brilliant must-read books related to forex. Yet, these recommendations attempt to summarise what readers will essentially learn from every book as each covers various themes.

For instance, while tens of psychology-focused books exist in forex, ‘Trading in the Zone’ is one of the most popular and easiest to digest. Another example is ‘Time Compression Trading’ focusing on more advanced concepts not applicable to less-experienced traders.

Therefore, there is something for everyone, and as they say, leaders are readers!

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