I absolutely love to read. It's calming and it lets me escape the daily grind to experience a fictional world or learn more about my current world through non-fiction. As my trading hobby grew, my desire to read more about trading grew as well.

One of the most common questions I get is: What books should a new trader read?

That's the topic of this post. But first:

Nothing on this site constitutes financial advice of any kind.
All investments come with significant risks, including the loss of all capital. Please do your own research before investing, and never risk more than you are willing to lose. I hold no certifications or registrations with any financial entity.

Here we go!

Quick note about what's important

If you look at my list of trading books from when I first started, you'll see that almost all of them are technical in nature. They're all about reading charts, understanding indicators, and picking out signs of trends. You can see my entire trading bookshelf on Goodreads.

As I progressed in my learning, I quickly realized that I should have started with more books about trading psychology. That's not to say that technical books aren't valuable. They're great! It's just that the most important parts of trading are all about having the patience to pick the best entries and then having the mental fortitude to know when it's time to head for the exit.

First pick: Best Loser Wins

I've written about this book on the site before, but it goes without saying that Best Loser Wins by Tom Hougaard is my ultimate favorite for new traders. Why do I love it?

  • It's easy to read. You could easily finish it over a long weekend or via several short reading sessions over a week.
  • It instills the notion that every trade has the potential to be a great winner or a big loser. Nobody wins every trade (except many of the traders I see on Twitter/X). 😂
  • Tom talks about how being uncomfortable is a feeling worth embracing and that fear is an emotion we can harness for our own benefit.

I've read this book twice and listened to the audiobook once. Both formats are excellent and the audio book narrator (Richard Faymonville) makes the arguments in the book carry the weight that they should.

When I say that it's easy to read, I mean that it flows well. It challenges tons of common thought around trading, so in that aspect, it can be jarring. That's probably why I enjoy it so much.

This is your crash course in trading psychology.

Second pick: Secrets for Profiting in Bull and Bear Markets

When someone first recommended Stan Weinstein's book to me, my first thought was "Wow, this book looks old." I dug deeper and noticed that it was written in 1988. How can an almost 40 year old book help me become a better trader today?

This book turned out to be the best book on the basics of technical analysis and trade mechanics that I've ever read. I'd argue that over 90% of it still applies well in 2025.

🚨
DO NOT BUY THE KINDLE OR KOBO VERSIONS OF THIS BOOK.
They look like someone took a copy of Stan's book and threw it into an old copy machine that had hair gel smeared all over the copier glass. It's terrible. Pages are tilted diagonally and charts are difficult to read.

I started listening to this as an audio book first with Scott Pollak's excellent narration. Scott's laid back, west Texas cattleman sound was an excellent compliment to many of the points that Stan made in the book. The audio book comes with PDFs of all of the relevant charts, but I ended up buying a physical copy and reading it again.

I love this book for several reasons:

  • Stan gives a dead simple approach to reading stock charts and understanding which phase is underway. You can put a 30 week moving average onto any chart, stand back, and say "Oh boy, that's a stage 3!"
  • Albeit a little dated, Stan gives some excellent explanations of stop orders, stop limit orders, and how to sell short. These look easy at first glance but Stan goes into the challenges with each. Things are a little easier here in modern times with much higher liquidity and computer trading, but these are good concepts to know.
  • You get an overview of how to identify stocks based on how they're performing against the S&P 500 and how to build a system around stop loss points.

One thing that made me chuckle was that Stan talked about receiving "chart books" in the mail weekly and he would use those to trade. Yes, actual books with charts in them. Delivered in the mail. Weekly. 😆 This reminded me of Nicolas Darvas' book where he traveled around the world in the 1950's getting erratic price updates via telegrams.

Stan's process is a great way to reduce stress and examine charts at a much higher level. It's easy to get caught up in the shorter term moves and miss the big picture.

Third pick: Trading in the Zone

The late Mark Douglas wrote an excellent book about trading psychology and so much more. Trading in the Zone has more jarring arguments in it than Best Loser Wins, but it delivers them in a much deeper way.

I couldn't finish this book the first time I read it. My progress bogged down in the first few chapters and I set it aside. Later, I came to realize that I wasn't ready to read it. My focus was heavily on technical analysis, but then Readwise dropped in a supplemental quote (a quote that I didn't highlight, but other people did) into my daily feed. It was this one:

You have two choices: You can try to eliminate risk by learning about as many market variables as possible. (I call this the black hole of analysis, because it is the path of ultimate frustration.) Or you can learn how to redefine your trading activities in such a way that you truly accept the risk, and you’re no longer afraid.
Quote from Trading in the Zone

It felt like Mark was speaking directly to me with this one. I thought that if I did a little more analysis, added one more indicator, or checked a few more things, I could eliminate risk from my trades. It turns out that what I really needed to do was change how I'm trading so I could accept the risk and move right along.

This is a difficult book to read. It's deep. It's repetitive. All of that is on purpose.

My recommendation to new traders is to begin with the audio book. Kaleo Griffith keeps the text flowing and he makes sure to emphasize the important points. After giving up on the Kindle version, I listened to the audio book on a car trip and loved it. I went back to the Kindle version and reread some chapters.

This is one of those books that reminds me that learning to trade is like any other business. Learning to trade isn't an overnight jaunt. It's a process, just like learning how to be an electrician, a nurse, or a manager. Nobody can understand it on day one and we learn more about trading and ourselves over time.

Summary

All three of these books would give any new trader a great start. The audio book versions are excellent for each and with the exception of Stan's book, they're great on e-readers, too.

Tom and Stan regularly appear on YouTube videos with interesting insights in how you can improve your trading. You can even find some of Mark Douglas' older videos on YouTube and chuckle at the extremely dated TV sets with old computers and charts on display.

Remember: like anything, learning how to trade or invest is a lengthy process with successes and setbacks. Reading these books and thinking through your mental trading process is like a basketball player practicing free throw shots for hours.

Is it fun? Not really. It's a lot of work.

Will it help when it counts at the end of a game and the score is tied? You bet it will.