Psychology is everything when it comes to trading. Whether you trade the stock market or the Forex market, you need to be mentally geared to follow your strategy all the way. Every time you slip away from your strategy to make some more money, you risk losing a lot of money. Similarly, every time you decide to re-adjust your stop loss closer because of fear of losing more money, you risk the market hitting your stop loss and then going in your direction. These types of emotions are very common in trading and it is all a matter of psychology. So today we are going to give you five trading psychology books to help you trade better:
Contents
Trading in the Zone
Source: Issuu
Trading in the zone is a phenomenal book and definitely a must have. The author of the book is called Mark Douglas and his goal is to teach you how to trade with confidence and discipline. This book teaches traders to accept that there is a risk in every trade you take. This therefore means that you should reduce your expectations on what the market will do.
You need to be aware that as much as a trade can go your way, it can also go the other way. The book provides no strategy on how to trade the market and so you should have some knowledge on the basics of trading before reading it. It is a great book if you are facing fear, greed and other distractions while trading. Mark Douglas, is also the author of another popular psychology book known as “the disciplined trader”.
Trade Mindfully
Source: Kobo
The author of Trade Mindfully, Gary Dayton, prides himself as being a mentor, trader and psychologist. With such expertise, he is able to write about things that we can relate to and how to overcome them. Gary Dayton, summarizes his book into 3 important areas; Understanding the mind, using cutting edge psychology and maximizing your trading performance. Each of these areas is explained in detail, giving you some invaluable points along the way. The theme of the book is basically the concept of mindfulness, which can be defined as being aware or conscious of a certain thing. As you read, you will notice that the author mainly uses examples from the futures and stock market but that should not worry you even if you are a spot foreign exchange trader. The content can be used in all types of markets.
The Daily Trading Coach
Source: LnwShop
The author of this book, Brett Steenbager, is also a trader and psychologist. What makes his book attractive to the reader, is perhaps the simplicity with which it is written. Unlike other books that give little regard to those who are just starting out, this one is written in a way that is understandable for both a beginner and regular trader. In the book, you will find 101 practical lessons to help you deal with the emotions and problems often encountered by traders. The book is also quite motivational.
The intelligent investor
Source: eBooks
This book was published in 1949 and is hailed by Warren Buffet as the best investing book ever written. He actually read this book in 1950 when he was 19 years old. The author of the book was called Benjamin Graham and was an analyst of the stock market. The book shows how he used to select the stock to trade and also his mindset. It can help you in your selection of some of the best performing stocks out there. As mentioned by traders who work with Admiral Markets, if you are looking to improve your psychological mindset while trading, then this is a great book to read.
Sway
Source: Amazon.com
This book was written by Ori Brafman and Rom Brafman. As traders, we are always aware of a number of situations in the market, yet sometimes we choose not to act or rather feel powerless to act. This is the main reason why it is very difficult to close a losing trade. This book addresses such situations as well as ones which traders are unaware of. You will also learn how risk affects your trading decisions and some secret motivators that guide you to make a decision. This book has a lot of teachings directed towards developing your psychological mindset.
Conclusion
Psychology is one of the most important factors in trading and therefore needs to be mastered. The books mentioned above, will help guide your journey to becoming a better trader all round. If you learn from the best, you will acquire their traits and eventually become like them or even better.
