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Great Books for Professional Stock Traders

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A woman reading a finance book for professional stock traders.

Stock trading is something of an art and just like painting or sculpture, it’s open to interpretation. That’s reflected in the sheer variety of investment theories and strategies advisors utilize to navigate the markets. If you’re interested in expanding your knowledge to better serve your clients, there are quite a few books for traders you might consider adding to your reading list.

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8 Must-Read Books for Traders

Stock trading books can be broad in their approach or very narrow, depending on the core topics being covered. Some offer a more philosophical approach to the principles of stock trading while others take a deeper dive into a singular trading strategy. Whether you gravitate toward one or the other, the following list includes some of the most often recommended books for traders.

1. “The Intelligent Investor” by Benjamin Graham

Books for Stock Traders: “The Intelligent Investor” by Benjamin Graham

Released in 1949, “The Intelligent Investor” remains one of the most popular books on the topic of value investing. In the book, author Benjamin Graham proposes a straightforward idea: rather than conducting extensive analysis on a single company, investors should buy groups of stocks that are undervalued.

Applying simple earnings criteria to evaluate a group of companies produces better results, according to Graham. Since its publication, “The Intelligent Investor” has been updated and revised several times, but the core message of focusing on fundamentals in place of technical analysis remains the same.

2. “Market Wizards” by Jack D. Schwager

Books for Stock Traders: “Market Wizards” by Jack D. Schwager

“Market Wizards” is designed to be more inspirational than instructional, as the book features a series of interviews with renowned traders. The stories shared are designed to be a blueprint for achieving success with an emphasis on having the right mindset and applying it with the right method.

You may consider reading “Market Wizards” if you’d like to take a look behind the curtain at each trader’s methodology as you shape your strategy for investment decision-making. The book also yields insight into the most common reasons that traders fail and how to avoid that scenario.

3. “The Psychology of Money: Timeless Lessons on Wealth, Greed and Happiness” by Morgan Housel

Books for Stock Traders: “The Psychology of Money: Timeless Lessons on Wealth, Greed and Happiness” by Morgan Housel

Stock trading has an emotional component and as an advisor, it’s to your advantage to understand how emotional thinking and biases can influence clients’ behavior. “The Psychology of Money” examines how people think about money and why they think the way they do.

The book includes personal narratives, which may prove eye-opening if you’re interested in real-world examples of how thoughts about money translate into action. You might consider picking this one up if you’d like to gain a broader understanding of client behavior and decision-making.

4. “The Disciplined Trader: Developing Winning Attitudes” by Mark Douglas

Books for Stock Traders: “The Disciplined Trader: Developing Winning Attitudes” by Mark Douglas

“The Disciplined Trader” is one of the earliest books for traders that focuses on behavioral finance and psychology, as they relate to successful investing. Author Mark Douglas considers how limiting beliefs can hold traders back from achieving their goals, and how to overcome roadblocks to success.

The book is divided into four sections which are designed to help the reader identify their biggest challenges with trading and develop the skills they need to move past them. You might find that useful if you routinely run into clients who either intentionally or unintentionally place hurdles in their way that prevent them from getting where they want to go financially.

5. “Way of the Turtle: The Secret Methods That Turned Ordinary People Into Legendary Traders” by Curtis Faith

Books for Stock Traders: “Way of the Turtle: The Secret Methods That Turned Ordinary People Into Legendary Traders” by Curtis Faith

“Way of the Turtle” offers a slightly quirky take on the question of whether great traders are born or made. The book chronicles the author’s experience as part of an exclusive group of traders known as the Turtles, which included earning more than $30 million in less than five years.

Faith goes on to break down the exact methods and strategies he learned during his tenure with the Turtles and offers guidance on how to apply them as a trader. The book is part technical guide, part mindset meditation and there are plenty of nuggets of wisdom to be gleaned throughout.

6. “The Big Short: Inside the Doomsday Machine” by Michael Lewis

Books for Stock Traders: “The Big Short: Inside the Doomsday Machine” by Michael Lewis

“The Big Short” goes behind the scenes of the market moves that led to the 2007-08 financial crisis. The book features some of the financial heavyweights who predicted the subprime crisis, including Michael Burry who—correctly—foresaw the collapse of the real estate bubble.

It’s not only a tale of how to make a fortune during a market crisis, however. There are also stories of those who lost big, offering an interesting look at the intersection between human emotion and action when the chips are down both literally and figuratively.

7. “Trend Following, 5th Edition” by Michael Covel

Books for Stock Traders: “Trend Following, 5th Edition” by Michael Covel

Following market trends can be risky—unless you have a repeatable formula for success. That’s the central idea of “Trend Following,” in which author Michael Covel walks you through how real-world traders have leveraged trends to generate big wins.

Covel, who’s also explored the secrets of the Turtle traders, details the core concepts associated with trend following and how to establish rules for applying this strategy. This book could be an excellent read for advisors who are looking for guidance on how to help clients navigate periods of uncertainty in the markets.

8. “Best Loser Wins: Why Normal Thinking Never Wins the Trading Game” by Tom Hougaard

Books for Stock Traders: “Best Loser Wins: Why Normal Thinking Never Wins the Trading Game” by Tom Hougaard

Tom Hougaard believes that winning in the market is all about mindset. To truly succeed and achieve the highest levels of success, traders need to be willing to step outside the framework of what’s considered “normal” thinking about the markets.

“Best Loser Wins” is a look at how traders get caught up in technical analysis without understanding how conditions in the market affect their thinking. This could be an ideal read for any advisor who’s looking for an unconventional take on what it means to elevate your trading game.

Bottom Line

A woman reading a book about stock trading.

Reading books for traders can be an effective way to fill in your knowledge gaps and gain some fresh perspective on the markets. The books mentioned here are just a small sampling of what’s out there and you may find more to add to your list as you explore different trading topics.

Tips for Growing Your Advisory Business

  • If you’re hoping to attract more clients to your business, having an online presence that includes social media and a professional website is a must. There is, however, a simpler way to connect with prospects that doesn’t require you to devote hours to learning how to code or craft persuasive social media content. You can use an online lead generation service instead. With SmartAdvisor, for instance, you can get matched with leads that fit your ideal client profile.
  • In addition to reading books for traders, there are other ways to cultivate your knowledge base. For example, you might check out podcasts for advisors or read financial blogs. Following financial influencers and subscribing to the email newsletters of authority publications can also help you stay in the loop and up to date.

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