Top 10 Trading Psychology Books to Sharpen Your Trading Skills

Top 10 Trading Psychology Books to Sharpen Your Trading Skills


Trading is an art that calls for a stable mental state as well as a firm plan of action. The financial markets can only be mastered by people who acknowledge their own emotions, prejudices and choices. Trading psychology books are of immense significance in this case. What these texts do is they help readers understand the mental parts of trading while offering practical ideas on how to handle our feelings, develop discipline and thus enhance our trading capabilities. Here, we present to you the list of top 10 trading psychology books that every trader should read to improve his/her mindset for trading.

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1. "Trading in The Zone" by Mark Douglas

trading psychology books

"Trading in The Zone" is frequently considered the bible of trading psychology. It was created by Mark Douglas, a famous trading coach, who examines various mental and emotional difficulties that traders experience as well as strategies to be adopted.

Douglas claims that successful trading is 80% psychological and only 20% methodological. He helps traders change their natural biases and irrational habits to trade with the right mindset. He underscores how discipline, confidence and having a positive attitude are key to becoming successful traders.

This book is enriched with practical applications that make it a useful resource for both beginners and experts in the field of trade.

2. "The New Trading for a Living: Psychology, Discipline, Trading Tools and Systems, Risk Control, Trade Management" by Dr. Alexander Elder

The New Trading for a Living

"The New Trading for a Living" is written by Dr. Alexander Elder who is a professional trader and a psychiatrist; therefore, it presents an exhaustive tour of trading. It takes into account various aspects of trading such as psychology, discipline, risk management and trading systems.

In the book, Elder examines the psychology of trading that brings out how emotions like fear or greed can greatly influence the decisions made by traders. He stresses on the significance of discipline in trade and also offers practical tips to develop it.

Further, he highlights different systems for trade as well as tools used in his correct employment. In addition to this, the author provides valuable knowledge on risk control and management in trades hence making it indispensable material to any level of trader’s understanding.

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3. "Market Wizards" by Jack D. Schwager

Market Wizards by Jack D. Schwager

Classic trading book "Market Wizards" comprises interviews with some of the world’s most successful traders. The book is full of insights into how these top performers trade and think.

The author Jack D. Schwager goes in-depth on what makes these wizards tick, delving into their trading philosophies, strategies and experiences. It contains useful tips and wisdom which can be beneficial to those traders who seek psychological edge in their trading.

These traders believe that they succeed only because of their mindset and psychological approach to trading, which proves that without a doubt, psychology plays a vital role in achieving success in the financial markets.

4. "The Disciplined Trader" by Mark Douglas

The Disciplined Trader

Mark Douglas has another name for this “The Disciplined Trader” which talks about the psychological barriers that traders face and how they affect their trading performance. It gives practical ways of building mental discipline by dealing with negative feelings and tendencies.

Douglas stresses that discipline is essential in trading and offers concrete advice on how to cultivate it. He shows how rather than giving in to fear, greed and other negative emotions, traders can continuously succeed in their trades.

It’s a must-read book for any beginner or experienced trader as it contains real-life instances and advice that may be acted upon

5. "Trading Psychology 2.0" by Brett N. Steenbarger

Trading Psychology 2.0

Brett N. Steenbarger, the pedigreed trading psychologist and coach offers an encompassing manual in his book “Trading Psychology 2.0”. It covers emotional regulation, discipline, risk management, and psychological resilience.

From his vast experience as a trading coach, Steenbarger provides tips that can be directly applied to enhance how one trades. It essentially captures every aspect of trading psychology from emotional control to self-discipline and from managing risks to mental toughness.

In this respect, it is rich with practical exercises and self-assessment tools that will be helpful for traders who would like to improve their approach towards the psychology of trading.

6. "Market Mind Games" by Denise Shull

Market Mind Games

Denise Shull’s book, "Market Mind Games", challenges the conventional wisdom on trading psychology. She asserts that emotions should not be suppressed by traders but instead applied to aid in making right trading decisions.

The author is a performance coach and neuroscientist who takes us through the intricacies of neuroscience and psychology of trading. Traders are given practical ways to control their feelings and avoid psychological snares that may result into losses.

The book offers many case studies and usable tactics which make it a distinctive and indispensable resource material for traders seeking to improve their mental approach towards trading.

7. "Trade Your Way to Financial Freedom" by Van K. Tharp

Trade Your Way to Financial Freedom

The book, “Trade Your Way to Financial Freedom” by Van K. Tharp is a compendious guide for successful trading that touches on various aspects of trading such as psychology, strategy development, risk management and position sizing.

Tharp highlights the significance of trading psychology and suggests practical ways for cultivating a positive attitude towards winning. He also sheds light on how traders can conquer their fear, greed and other emotions that may hinder them from becoming consistent in their trade.

Additionally, the book provides vital points about strategy development, risk management and position sizing, which makes it a necessary read for any trader who aims to improve his/her performance in the market.

8. "Thinking, Fast and Slow" by Daniel Kahneman

Thinking, Fast and Slow" by Daniel Kahneman

It is not exactly a trading book; however, Nobel laureate Daniel Kahneman’s “Thinking Fast and Slow” gives us an insight into how human beings make decisions that can be applied in trading.

Two systems – according to Kahneman – determine the way we think: System 1 is fast and intuitive while System 2 is deliberate and slow. This knowledge can enable traders to make better choices under stress and avoid universal cognitive errors.

The book provides many practical illustrations and applications, which makes it a great tool for anyone interested in improving their decision-making abilities in trading.

9. "The Little Book of Market Wizards" by Jack D. Schwager

The Little Book of Market Wizards

The Little Book of Market Wizards is an abridged volume of Jack D. Schwager’s ‘Market Wizard’ series. It contains the distilled knowledge and wisdom of some of the world's best traders.

Schwager addresses several areas, such as trading psychology, risk control, strategy formulation, and trading discipline. The book imparts a great deal about the mindset and techniques utilised by major traders; hence, it is useful for those wishing to enhance their performance in the stock exchange.

10. "Atomic Habits" by James Clear

Atomic Habits by James Clear

James Clear's Atomic Habits is a powerful book that can help traders develop better habits while breaking bad ones. Although it does not concentrate on trading, the principles and strategies found here can still improve trading performance.

It demonstrates how small, consistent changes over time can lead to enormous results. In this respect, he offers practical suggestions for building good habits and destroying bad ones, as well as learning to master tiny behaviours that result in great achievements.

In terms of trading, these might involve adhering strictly to a trade outline, controlling oneself about trades taken and risks assumed, keeping cool when things go wrong, and being patient.


A trader’s success or failure depends on trading psychology. By grasping their own psychological tendencies and emotions, traders are able to make wiser decisions hence boosting their overall outputs. These above mentioned books provide insights into trading psychology as well as practical strategies for winning the game.

Finally, if you want to know more about trading chart patterns and candlestick patterns, you can refer to a chart pattern and candlestick pattern book by tradingbuddy. It is an excellent addition to your knowledge of trading psychology that will help you improve your skills in this area.

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