Top 25 Trading Books for Novice Traders
Fundamental and technical analyses of financial markets are the basics of successful trading. The principles of trading strategy, money management, and emotional control are equally important. But you can’t learn it at universities. The optimal solution is books on trading for novice traders.
Thousands of works of varying volume and quality have been written on these subjects. Most of them are objectively inconvenient for those who want to start trading on Forex or the stock market. They are too complicated or discuss only the obvious. To assess a book’s practicality on trading you need to be a professional.
The experts at the Traders Union have analyzed most of the books on trading. The summary analysis allowed us to form a list of the top 25 books on trading. The Union divided them into 5 categories. Familiarizing yourself with these books is useful regardless of your area of interest, be it futures or cryptocurrency.
Do you want to start trading on Forex? Open an account at Roboforex!Glossary
Forex is an international financial market where currencies are exchanged. Central banks of different countries, companies conducting international business, commercial banks, and private traders are involved in Forex trading.
Forex broker is an organization that acts as an intermediary between the currency buyer and seller in the Forex market.
Currency pair is a trading instrument, which is formed from the ratio of prices of two currencies when buying one currency for the other. The first currency in the pair is the base currency, the second one is quoted. An example is the EUR/USD pair, where the EUR is the base currency, which is traded for U.S. dollars (USD).
A demo account is a special type of account available to be opened on the broker's trading platform. The key feature of a demo account is that you trade on it using virtual money. However, trading tools, charts, signals, and quotes are real.
Leverage is borrowed funds provided by the broker, allowing the trader to manage significant amounts in the market, having only a small amount of their (the trader’s) funds used to cover margin requirements.
A Forex swap is the interest or amount of money your brokerage company pays or charges if you hold a certain position overnight.
Spread is the difference between the best sell and purchase price when exchanging one currency for another.
Top 5 books on technical analysis
Technical analysis is the evaluation of statistical data on a selected asset to predict future price movements based on patterns of price changes in the past under similar circumstances.
The basic tool of technical analysis is the price chart. The trader compares how the value of the asset changed before and how it is changing now. This allows for identifying patterns within which the price moves. Technical analysis allows for making successful forecasts, so any trader needs to know how to work with charts.
1. Japanese Candlestick Charting Techniques | Steve Neeson
This is one of the best books on trading for novice traders written by an outstanding financial analyst. It is entirely devoted to the so-called Japanese candlesticks analysis method of displaying prices on the chart. In the first part, Neeson explains how to work with this tool and gives 50 of the most common patterns. The second part gives practical advice on how to combine Japanese candlesticks and other tools of technical analysis, such as trend lines, market profiles, and oscillators.
2. Technical analysis. Plain and Simple | Michael Kahn
This work takes pride in place among the best books on trading. The book is designed for those who have never worked in the financial markets. Kahn explains the basics of indicators. A chart analysis gives specific methods and techniques and demonstrates each step of the analytical process with real examples. The book is cross-functional and is suitable for developing a trading strategy for any market, including trading in currency pairs, securities, and cryptocurrencies.
3. New Thinking in Technical Analysis | Rick Bensignor
This is an excellent book on trading for novice traders and is part of the Bloomberg professional library. It is written by a battalion of experienced stock market players. It includes 12 chapters, each chapter is devoted to methods and techniques of technical analysis when working with a particular asset such as currencies, futures, stocks, options, etc. This is a fundamental work, which is unique since all the information here is the real experience of the authors. Therefore, every paragraph is applicable in practice.
4. Technical analysis. Full Course | Jack Schwager
Schwager is among the best financial market analysts of our time. His book is dedicated to the basics of technical analysis. The author consistently explains the terms and definitions, then moves on to specific methods and trading techniques. He considers various systems and indicators, not in an abstract way, but in terms of the real markets. The work is wonderfully structured, the information is given concisely and clearly, and the emphasis is placed on modern strategies for technical analysis.
5. Technical Analysis from A to Z | Steven Achelis
This trading book is highly praised in the trading segment. Achelis, who has been successfully trading on various markets for over 20 years, has developed his system of learning the methods of technical analysis. He is considered a guru on today's indicators, up to the parabolic system and Fourier transformation, which is considered to show first-class performance among the leaders of the market. This work is understandable even by novice traders.
Top 5 books on trading and trading strategies
There are many works devoted to trading strategies among the books on trading for novice traders. A strategy is a set of rules that allows a trader to systematize trading, gives a clear understanding of when to enter a trade, when to exit it, and when it is better to wait. A competent strategy minimizes risk and ensures profitable trading.
There are many trading strategies because each trader develops his own system. But the basics are general. The basic strategies are formed based on a certain trading style and a specific goal. They are the foundation for a trader to succeed.
6. Investment Fables: Exposing the Myths of ‘Can't-Miss’ Investment Strategies | Aswat Damodaran
This book on trading was published in 2007, but will always be relevant. Aswat Damodaran is among the most successful self-taught traders and reveals the main problems of novice traders and clearly shows how to solve these problems. He gives detailed consideration to the typical strategies and shows how to upgrade them to fit your own needs using specific examples. The book will be useful no matter what type of investing you prefer and what financial markets you work with.
7. The Encyclopedia of Trading Strategies | Jeffrey Owen Katz
Undoubtedly, this is one of the best books on trading for novice traders. It was co-authored by Owen and Donna McCormick, one of the few female traders to have made it to the world level. The book provides all the basic strategies for investing and active trading in the financial markets. The authors explain in detail how to combine different methods and tools to form your own trading strategy that fits your particular trading style and goals.
8. How I Trade for a Living | Smith Gary
This trading book was written by a distinguished self-taught trader who turned $2,000 into $650,000 in 13 years. Smith never took excessive risks, preferring measured trading strategies. Therefore, his work is focused on novice traders who practice a thoughtful, consistent approach, seeking to minimize risk in every possible way. If this is your path, then Gary Smith's personal experience will provide you with useful insights you won't find anywhere else.
9. The New Market Wizards | Jack D. Schwager
In this work, Schwager talks to the best traders in the U.S. and ask them about their trading strategies and how they apply them to different markets. The book is unique because the author interviews successful traders and tells their stories. He reworked the material to make the explanations of professional traders understandable even to novice traders. Therefore, the New Market Wizards is considered one of the best books on trading for beginners. There is no expansive theory, only real trading strategies, and advice on adapting them to your goals and objectives.
10. The Intelligent Investor | Benjamin Graham
This is another iconic work from a prominent financier. The book is nicknamed "The Bible of the stock market", and rightly so. Graham demonstrates as clearly as possible the principles of developing trading strategies with a list of methods and tools, optimal in any given situation. Modern editions of the book are published with commentary by Jason Zweig, an investment columnist for The Wall Street Journal.
Top 5 books on fundamental analysis
Technical analysis is one of the two pillars of successful trading. The second pillar is fundamental analysis. It is a study of the financial market that doesn’t involve price charts. For example, news, major companies' annual reports, experts' opinions. All these avenues form an information field in which there are always signals that allow forecasting price movements.
It is extremely important to know the methods of fundamental analysis to build a successful trading strategy on the stock market or any other market. Otherwise, the trader will not be able to react timely to changes in the current situation and predict trends.
11. Beating the Street | Peter Lynch
Lynch is a legend in the investment world. In his trading book, he clearly shows how the methods of fundamental analysis work. The author consecutively considers the principles of monitoring financial markets, describes the mistakes novice traders make, and teaches the methods of diversification of risks. Experts agree that the Beating the Street book collected all the popular questions in fundamental analysis and gave a correct answer to each of them.
12. The Little Book that Still Beats the Market | Joel Greenblatt
Greenblatt's work is considered the easiest book to master among trading books for novice players. The famous American investor explains what fundamental analysis is, how to use news and official documents of companies to evaluate their prospects and determine trends. The information is presented easily, with a humorous undertone, the analyzed methods are examined with specific examples for clarity.
13. The Great Investors: Lessons on Investing from Master Traders | Arnold Glen
This trading book is structurally similar to the New Market Wizards by Schwager, which also analyzes the stories of famous traders. The difference is that Glenn focuses on trading strategies based on fundamental analysis. The book brilliantly reveals the basic mechanisms of financial markets by using examples of recognized professionals and shows how to correctly assess certain events when projecting the trend of a selected asset.
14. Warren Buffett. How to turn $5 into $50 billion | Robert Hagstrom
Warren Buffett is the most famous investor so dozens of books have been written about him. But Hagstrom's book is not so much about Buffett as it is about the strategies he used. A large part of the work is devoted to how the legendary investor carries out fundamental analyses of the financial markets. This is certainly unique information and has no analogs. The book also discusses the analytical approaches of Ben Graham and Charlie Munger, which greatly shaped Buffett to become a successful investor.
15. How to Read Financial Information | Michael Brett
According to the abstract, Michael Brett's book is designed to explain the language of money in an accessible way. It is considered one of the best books on trading for novice traders because the author explains simply and clearly the mechanisms of financial markets. He reveals the dependence of asset movements on external factors, including the decisions of company management, reports, and news. Each chapter has a block with examples that include real situations of famous investors and companies, which facilitate understanding the theories.
Top 5 books on the psychology of the financial markets
Trading strategies that include methods of fundamental and technical analysis are all important to a successful trader. But financial prowess is irrelevant if the trader is intolerant of risk, unable to keep emotions under control, and makes decisions based on irrational assumptions.
The psychology of trading is also an important aspect of trading in financial markets as it involves knowing how to analyze Japanese candlesticks, etc. That is why experts always recommend to novice traders specialized publications written by professional investors that consider the psychological processes that affect trading.
16. Definition of Irrational Exuberance | Robert Schiller
This is considered to be the best book for novice traders that explains the psychological processes that drive participants in financial markets. Schiller shows what speculative bubbles are and why novice traders are often driven by irrationality and they don't even realize it. The author examines the issues of overconfidence, overinvestment, and false risk assessment. These are points that every trader faces, so it is important to know how to properly react to them.
17. Trading in the Zone | Mark Douglas
This book is surprisingly easy to understand because it clearly shows the importance of the psychological state of the person who trades in the financial markets. There are no professional terms here, Douglas explains the psychology of trading to those who take their first steps on the trading path. He carefully defines the range of difficulties faced by novice traders and shows how to cope with them, ensuring a stable perception of the market.
18. Fear, Greed, and Panic: The Psychology of the Stock Market | Cohen David
This is an excellent trading book that focuses on how to interact with the market mechanisms while avoiding high levels of stress. In Fear, Greed, and Panic, Cohen examines dozens of situations that every active market participant experiences, including over-optimism. The author's experience in this sense is invaluable, and he willingly shares it.
19. The Disciplined Trader | Mark Douglas
This work is not often mentioned among books on trading for novice traders because only a high-level professional can appreciate its uniqueness and importance for novice traders. Douglas clearly explains why concepts necessary for success in society turn into psychological barriers in the financial markets. From personal experience, he reveals how to abandon traditional thinking and impose understanding in favor of the creativity and confidence necessary for successful trading.
20. Mean Markets and Lizard Brains | Terry Burnham
The author is an economics professor who has been working in the stock market and trading stocks, real estate, and currencies. He has a unique experience and a simple syllable, which allows him to quickly convey to the reader the irrational reasons for behavioral anomalies that most often prevent traders from making winning bets. That is why Mean Markets and Lizard Brains is rightly considered one of the best books on trading.
Top 5 books on futures and options trading
Futures markets are no less popular than stock markets. A futures trade is a contract, and it determines the price and delivery date of an asset, while the other parameters are standardized. Futures trading can be extremely profitable, as can trading in other derivative instruments, including options.
Options have their own specifics. Unlike futures, the buyer of an option doesn’t have to sell it later. Futures and options markets have several conceptual features. You need to know these features to make successful transactions.
21. Trade Stocks and Commodities with the Insiders: Secrets of the COT Report | Larry Williams
As one of the most successful traders in the world, Williams tells how he got started in the futures market and what helps novice traders to succeed today. He suggests abandoning the traditional methods of fundamental and technical analysis to focus on the leading players and non-trivial sources of information. The book talks about futures trading without working with other markets.
22. Single Stock Futures: A Trader's Guide | Patrick L. Young and Charles Sidey
This work is invariably at the top of futures markets trading books. The reason is that Young and Sidey present the basic theory in simple English and immediately supplement it with practice from their own experience. The book explains the mechanisms of futures pricing and describes the practical application of related instruments. It shows how to successfully minimize risks and correctly predict price dynamics.
23. Technical Analysis of Futures Markets: Theory and Practice | John J. Murphy
This is one of the few trading books that focuses on technical analysis in futures trading, although experienced traders more often use fundamental analysis or a combined approach. Murphy focuses on novice traders, so he begins his explanation with theoretical basics. The author has a non-standard approach to basic definitions, it is fascinating and allows the reader to better assimilate the information received to acquire useful skills.
24. Forward and Futures Contracts | Vladimir Selyukov
This is the only book for novice traders from a Russian-speaking author that makes the top list. As is clear from the title, Selyukov talks about contracts of two types – futures and forwards. He provides a methodology for calculating prices, rules for managing risks, and gives practical recommendations. The format of the book is similar to a traditional textbook because the information is well structured and presented succinctly.
25. Options, Futures, and Other Derivatives | John C. Hull
This book is primarily about risk management, which is why it is especially useful to novice traders. Hull doesn’t focus strictly on the futures markets but considers other financial derivatives. Also, the reader is offered a wide range of trading strategies with explanations of why certain methods are most effective with specific derivatives. No prior knowledge of futures and options is required to understand the text.
Why are books a good choice for learning to trade?
Today, when there are a lot of video courses, recorded webinars, and guides, many people still prefer books on trading. It's not just because it's a traditional method of training that is familiar to us since early school. For the most part, books on trading for novice traders are not typical textbooks, although they are also well structured. Often a trader who has decades of successful trading experience will share the knowledge he's gained over that time in a book format.
That's why the book format is often preferable to alternative sources of information. There is one more thing, the best video guides are paid, or brokers provide access to them only if you have a certain amount on your account. The best books on trading you can download from the internet for free to your smartphone and read at your convenience. Certainly, You can buy a book in printed form, if that is more convenient for you.
The third point is that the book gives you constant access to all the information it contains. You can reread a chapter or even a paragraph as many times as you need to understand it. In the case of online seminars and webinars, there is no such possibility. Moreover, people often acquire information in text form more efficiently than when the same information is dictated. That's why trading books are in demand and are an effective method of self-study.
Best brokers for novice traders
Trading books alone are not enough to become a successful investor. Choosing a broker is no less important since trading terms determine the possibility for a trader to reduce the risk and to trade with maximum comfort. Demo and cent accounts can serve as examples. On demo accounts you trade according to real market rules, but with virtual currency. This is a unique opportunity to practice methods of fundamental and technical analysis, as well as to test your trading strategy.
Cent accounts are similar to standard accounts, but they are opened in cents, not dollars, so there is no risk of significant financial losses. Another point is the broker's commissions. If they are high, the trader has to make more bets to increase his profits. It breaks his trading strategy and increases the probability of making an unsuccessful decision. Other nuances determine the importance of choosing a good broker. Find below a list of the top 3 platforms for novice traders.
IG
IG is the company that started spread betting, so it's not a surprise that it's the biggest broker of spread bets in the world. It has an extensive range of investment instruments, including spread bets and CFDs.
It's regulated by the FCA, CFTC, and NFA in the US. It offers account protection and guaranteed stop losses as well (not for US clients).
The reason why it's the best is that there are a lot of learning resources, so investors can learn to trade with spread betting quickly.
RoboForex
RoboForex is one of the leading brokers globally, offering a wide range of financial trading instruments, including forex. With small spreads and leverages up to 1:2000, it offers some of the most competitive currency pairs (over 40).
RoboForex is particularly ideal for automated trading, i.e., copy trading, as it implements trading strategies almost instantaneously. The company has a reliable infrastructure that delivers good speed. Pair that with price alerts, and you have yourself a platform you may actually make profits off.
The broker uses MT4, MT5, and Web Trader platforms. It also provides negative balance protection, which is one way to mitigate risk in automated trading.
Interactive Brokers - Best for Active Stock Trading
The Interactive stock brokers platform is an online stock trading platform with many tradable securities and low margin rates. The platform belongs to Interactive Brokers Group, Inc. The platforms IBKR Lite version provides ETFs and commission free trades on stock. The Interactive brokers platform is attractive to active trading members who often have low per-share pricing.
👍 The interactive brokers platform is preferable
• It boasts of having robust tools and strong research
• The platform presents many selections of investments
• If offers discounts for the NerdWallet users that get the IBKR pro version
• The platform has Cryptocurrency trading for BCH, BTC, and ETH
• 24 hours support is available, but the efficiency of this service is pending verification
👎 The Interactive Brokers platform is disliked
• The platform has a site that is challenging to navigate
Expert Opinion
While experience is ultimately what shapes a trader, books allow you to stand on the shoulders of those who have walked the path before.
Of all the books listed here, I have to say that Jack Schwager's Market Wizards series is personally my favorite. I've read each title in the series multiple times over the years. What I find so compelling about these books is that they don't just teach trading strategies or theories. They take you straight into the minds of some of the most successful traders across different eras. You get to hear directly from them about their thought processes, how they analyzed the markets, dealt with emotions, and ultimately achieved phenomenal results. Reading their stories was incredibly motivating and inspiring for me.
Some additional advice I would offer:
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Don't try to read everything at once. Trading books contain a wealth of information but it's impossible to absorb it all quickly. Start with 2-3 core books that interest you most and focus your studies.
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Take thorough notes as you read. Jot down definitions, strategies, charts, and anything else you find especially insightful.
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Test ideas from the books on simulated platforms before live trading. Many strategies sound great on paper but you need to see how they perform in real-time conditions.
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Revisit books periodically as your experience grows. You'll be surprised how much more you get from books the second or third time around.
FAQs
What do trading books offer?
If it is a quality publication that is written by an experienced professional, the book will clearly explain the theories of working with financial markets, help to develop your trading strategy, and minimize risks.
What is the first thing to learn?
There are books for novice traders that succinctly address the widest range of issues. Such books are the most preferable at the start. Thereafter, you may read more specialized literature that is devoted specifically to the futures or other markets.
How to determine if a book is useful?
If you're not a professional trader, you can't. That's why experts at the Traders Union have compiled for you a list of the best books on trading. All editions presented here are time-tested. They offer structured and practical information on the theories of trading.
What else do you need besides books?
Your trading strategy must be tested, plus you need to master your skills before entering the real market. Demo accounts can help followed by cent accounts. Your broker should provide these types of accounts and generally favorable trading terms (low commissions, lots of instruments, convenient terminals, etc.).
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Team that worked on the article
Mikhail Vnuchkov joined Traders Union as an author in 2020. He began his professional career as a journalist-observer at a small online financial publication, where he covered global economic events and discussed their impact on the segment of financial investment, including investor income. With five years of experience in finance, Mikhail joined Traders Union team, where he is in charge of forming the pool of latest news for traders, who trade stocks, cryptocurrencies, Forex instruments and fixed income.
The area of responsibility of Mikhail includes covering the news of currency and stock markets, fact checking, updating and editing the content published on the Traders Union website. He successfully analyzes complex financial issues and explains their meaning in simple and understandable language for ordinary people. Mikhail generates content that provides full contact with the readers.
Mikhail’s motto: Learn something new and share your experience – never stop!
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.
The topics he covers include trading signals, cryptocurrencies, Forex brokers, stock brokers, expert advisors, binary options. He has also worked on the ratings of brokers and many other materials.
Dr. BJ Johnson’s motto: It always seems impossible until it’s done. You can do it.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO). Mirjan is a cryptocurrency and stock trader. This deep understanding of the finance sector allows her to create informative and engaging content that helps readers easily navigate the complexities of the crypto world.