Are you trying to get started as a Day Trader ? This article will help you to take your first steps by providing you with a review of the top 10 Day Trading Books.
Day Trading can be very lucrative, that’s sure. Combined that with the freedom to work wherever and whenever you want, no wonder it attracts so many aspiring investors.
But very few traders make it. The reasons? Not the ones we think.
Finding a trading strategy is not that difficult, but what is more difficult, is getting the right mindset.
There are many books on day trading, and making a choice isn’t simple. The books I’ve selected fall in several categories.
- The Best Day Trading Books for Beginners
- The Best Books for Advanced Day Trading Techniques
- Books on the Psychology of Day Trading
If you’re a complete beginner and want to know more about trading before you start reading books, you can check my full Guide to Start Trading.
What does Day Trading mean and what are the requirements?
A Day Trader is basically a trader with an intraday strategy. That means he will open and close all his positions within the same trading day. At the market bell every day he will have no open position.
The favorite markets for most day traders are forex or stocks. They are the most liquid, with competitive transaction costs.
Some years ago, Day Trading would actually only be done on the trading floors of banks, hedge funds or financial institutions. With Internet and the development of online brokerage, Day Trading is now accessible to the retail trader.
However, it is quite regulated. For example, in the US, the “Pattern Day Trader” rule obliges day traders to keep a minimum balance of $25,000 on their accounts at all times, or face account closure. This acts as a security
Day Trading requires a good background in technical analysis and a solid psychological profile, especially for the more agressive forms of Day Trading such as Scalping or High-Frequency Trading.
So now let’s dive in, and find out about the Top 10 Day Trading Books for 2020.
The Best Day Trading Books for Beginners
How to Day Trade for a Living: Tools, Tactics, Money Management, Discipline and Trading Psychology, by Andrew Aziz
This book is a bestseller and one of the best Day Trading books around. It comes out consistently on top of most rankings when it comes to Trading books.
If your goal is to be a Day Trader, to have the freedom to work and live from anywhere in the world, with the flexibility and money that comes from successful training, then this book is a good place to start.
Andrew Aziz also runs a website called BearBullTraders.com where he has gathered a Community of traders around his methods and strategies.
Topics covered in the book: How day trading works, risk and account management, how to find stocks for trades, tools, and platforms, introduction to candlesticks, most important day trading strategies, step-by-step successful trading, next steps for beginner traders, Andrew’s 11 rules of Day Trading.
Andrew Aziz has also written a Practical Guide to follow up from his bestseller.
This books looks at all the tools you need as a Day Trader, from stock scanners, to software and platforms.
It then moves on to practical subjects such as how to find the right stocks, how to trace support and resistance and how best to manage your trades.
It is well illustrated and contains numerous trade examples.
This book has been an Amazon bestseller for years. Toni Turner is a trader / educator with over 15 years experience, she’s a popular speaker at financial conferences and trading forums all over the US.
Her book explains what it means to be Day Trader. It gives a complete overview of the strategies, the risk management and the psychological aspects of a Day Trader. Rarely will you find so many aspects covered in a single book. The book is full of quizzes, checklists, and covers all the technical terms you need to learn, making it an extremely practical startup guide.
No serious trader can ignore this book and the teachings from the legendary William O’Neil. The book has sold over 2 million copies, and has popularized the author’s famous CANSLIM model.
It offers a full investing system with a 7-step process tuned towards selecting the best stocks while optimizing your risk / reward ratio. The system is a philosophy of screening, selecting, buying and selling common stocks. The letters refer to :
C=Current Earnings (stocks with recent quarterly growth in EPS)
A=Annual Earnings (annual EPS growing for the past 5 years)
N=New (the company should have undergone a recent change)
S=Supply and Demand (the universal laws governing markets)
L=Leader or Laggard (pick the leaders in their industry)
I=Institutional Sponsorship (are the big money managers in?)
M=Market Direction (are you in a bear or bull market?)
The book explains in great detail each of these elements, with concrete examples, charts, graphs and methodologies. There are numerous results showing the superior performance of the CANSLIM model.
If you want to know more about William O’Neil’s investing principles, he is the founder of the incomparable Investors Business Daily (IBD) website, the no.1 website to help traders make the best investment decisions. You can check that out too.
William O’Neil has also written a book dedicated at “Putting the CAN SLIM Concepts into Action“.
The best books for Advanced Day Trading Techniques
Forex Price Action Scalping: an in-depth look into the field of professional scalping, by Bob Volman
Scalping is an intense form of Day trading where you take numerous short trades (sometimes only a few seconds), making the most of small movements in the market.
This book will cover all the intraday tactics that can help you become a successful scalper. The chart setups, the trade entries, and trade management tactics, along with the money management aspects.
There aren’t that many books covering the topic in detail, from the technical aspects to the psychological ones. The techniques taught in the book are mainly price action.
Bob Volman’s book is a must-have in everyday serious trader’s library.
Topics covered in the book: basics of scalping, trade entries, trade management, trade selection, account management.
Mastering the Trade: Proven Techniques for Profiting from Intraday and Swing Trading Setups, by John F. Carter
John F. Carter is a well-known contributor to leading publications such as SFO magazine. He’s been featured on ABC money and a regular speaker at Trader Expo. He has been a professional trader and trading advisor since 1998 and has launched the website Tradethemarket.com.
In Mastering the Trade, he covers the tools and techniques that every day trader needs in order to master what he calls the “5 key traits of professional traders”.
The book has three parts:
The first part is a trader bootcamp, explaining how markets work and what are the best ways to get mentally prepared for successful trading and investing.
The second part analyzes the best intraday and swing-trading setups for futures, stocks, options, and Forex.
Finally, the third part gets into the details of traders’ game plan, with premarket checklists, the traders’ business plan, and the tips and tricks when it’s not working for you, no matter what you do.
The Best Books on the Psychology of Day Trading
Mark Douglas goes after the mental reasons that prevent traders from getting consistent results.
He tackles the market’s myths, challenges them and teaches traders to face the reality of risk and overcome random outcomes.
Trading in The Zone is about the mindset needed by successful traders. Now, if you’re a beginner, you might be under the impression that what you need most is a strategy, indicators, trade plans. In fact, that’s only a small part of what you need to be successful.
All traders know it, your greatest enemy is within you. Failure will usually come not from a failed system but from a weak mindset.
This is why this book might not be the first one you need to read. However at one point it will become essential, and that’s the reason it has been receiving so much praise for so long.
Stop thinking, start doing. Your WILL see a difference in your trading results.
Topics covered in the book: fundamental, technical or mental analysis, the lure and dangers of trading, taking responsibility, consistency: a state of mind, the dynamics of perception, the market’s perspective, the trader’s edge (thinking in probabilities), working with your beliefs, the nature of beliefs and their impact on trading, thinking like a trader.
The New Trading for a Living: Psychology, Discipline, Trading Tools and Systems Risk Control, Trade Management, by Alexander Elder
The first edition of this book, Trading For a Living, is one of the best-selling trading books of all time. In this updated version, Dr Elder teaches a complete approach to the markets for anyone wanting to develop a successful trading system.
The book includes trade plans, charts, graphs, templates for rating stock picks, and basically all the tools and techniques you need to develop a systematic approach to markets. It will also give you very actionable advice on risk management, trading psychology, and basically all the things we do that prevent us from being successful.
Many traders still refer to this book as their favorite.
Topics covered in the book: individual and mass psychology, classical chart analysis, computerized technical analysis, volume and time, general market indicators, trading systems, trading vehicles, risk management, practical details, good record-keeping.
If you’re interested, there’s also a full Study Guide that complements the book.
The Daily Trading Coach: 101 Lessons for Becoming Your Own Trading Psychologist, by Brett N. Steenbarger
This book is quite unique. It is organized in ten chapters containing 10 lessons each, destined to help traders improve every aspect of their approach, mindset and techniques.
It covers the change process you need to engage in if you want to become a confident trader and the ways you can cope with stress and distress. The book also details the steps toward self improvement and many techniques of self coaching (tolerating discomfort, challenging our defenses, …).
Most lessons are quite short, 3 to 5 pages long, making this an easy book to pick up and read on the fly.
As a constant improvement and self-coaching tool, this book is a useful addition to any serious trader’s library.
This book has been called the holy grail of trading information.
It exposes Van K. Tharp’s unique 17 step trading model in a real trading masterpiece. It features interviews with traders, and breaks down what a trading system is and how you can develop your own by picking some examples within the book.
It is a kind of self-help psychology manual for traders and is necessary for anyone wishing to get serious with day trading.
Topics covered in the book: the Legend of the Holy Grail, judgemental biases, setting objectives, steps to developing a system, selecting a concept that works, trading strategies that fit the big picture, six keys to a great trading system, using setups to jumpstart your system, entry or market timing, knowing when to fold’em, how to take profits.
I hope this list has proven useful. I’d love to know what are your favorite Day Trading Books, leave me a comment below and share your tips!