There are thousands of books written about Financial Markets that provide a great basis for knowledge and understanding of markets. However the biggest challenge for most traders is not knowledge but mindset: The mental, emotional and psychohological aspects of trading and investing.
Books on mindset related to trading are less abundant, though some of the ones which have been written on tihs theme have becomes classics that every trader will have heard of, if not at least read.
I have asked people to recommend books which help they have felt helped them with the development and growth of mindset and personal performance.
I have constructed two lists of these books:
- List 1 refers to books which are directly related to Financial markets.
- List 2 refers to non-Financial Market books which help in developing Mindset and Mental Strength for the Financial Market battles ahead.
List 1: Books on Mindset, Psychology and Performance directly related to Financial Markets.
Markets Wizard – Jack Schwager I recommend the entire series, but if you don’t want to, at least read the first two. In my opinion reading Market Wizards should be mandatory for all traders.
Reminiscences of a Stock Operator – Edwin Leferve If you’ve never read this, you should - It remains the all time classic trading book and remains as relevant as ever, almost a century after it was first written. - It is also now available in audible form.
Trading in The Zone – Mark Douglas Many people refer to this as the Bible. Douglas brilliantly analyses trading behaviours from a psychological perspective and offers tips and ideas to reduce the negative impact of these.
The Disciplined Trader – Mark Douglas Less well known than the above, but also a great book with many great insights and perspectives.
The Way of the Turtle – Curtis Faith In 1983, legendary commodity traders Richard Dennis and William Eckhardt held an experiment to prove that anyone could be taught to trade. It was known as the Trading Turtles experiment. Curtis Faith was the most successful of the Turtles and shares his experiences in this excellent read.
Market Mind Games – Denise Shull Denise is a former trader and now a top Trading Performance Coach. In this book Denise gets inside the trader's mind from a different angle. Denise, who has has also studied neuroscience, has an exceptional understanding of what leads to psychological disturbances in performance.
The Hour Between Dog and Wolf: Risk-Taking, Gut Feelings and the Biology of Boom and Bust. - John Coates Coates is a neuroscientist who use to work inside an investment bank's trading business and thus has first hand experience of the challenges of trading. Coates provides a very interesting perspective of trader and market behaviour from a Neuroscience angle.
The Psychology of Trading – Brett Steenbarger There are few people with a better understanding of Trader Psychology than Steenbarger. This is reflected deeply in this book, which though not a light read, is an outstanding journey into the psychological aspects faced by traders. The insights are strong and powerful.
The Behavioural Investor – Daniel Crosby Crosby is a psychologist who has written extensively about the psychological and behavioural aspects of investing. This book is quickly becoming a modern classic of investing. Though this book is focused more on investing than trading, but nuances aside, it is equally valid in many ways for traders.
Bite the Ass off a Bear – Garth Friesen A a much underrated book by a leading Hedge Fund manager which ties together interesting trading anecdotes from his experiences, his journey to the top-table and the challenges of getting there. It is also laced with a strong undercurrent of the author's humility.
Fooled by Randomness, The Black Swan, Anti-Fragility and Skin in The Game - Nassim Taleb One of the keys to success in Financial Markets is the ability to understand the nature of uncertainty and complexity, and to understand how it impacts you and how you work. Taleb's books explore this from various differing perspectives. Any and all of Taleb's books are highly recommened.
Thinking Fast & Slow – Daniel Kahneman. Behavioural Finance is all about understanding how people make decisions in conditions of heightened uncertainty. – Kahneman, a psychologist, is the High Priest of behavioural Finance. Though not directly about trading, you will not fail make the connections as you read.
The Little Book of Behavioural investing – James Montier Montier was my first introduction to 'Behavioural Finance'. Many years ago in my trading days, he wrote several articles which found there way to me and got my attention. This book is a brilliant short book on the psychological pitfalls encountered by people in Financial markets.
Thinking in Bets - Annie Duke. Annie Duke is a former World Series of Poker champion who talks about how people can embrace uncertainty and make better decisions. Whilst this is not a book directly about trading and investing, I've included it as it is so closely related and has been recommended by so many traders and investors.
List 2: Books which can help develop Mindset and Performance not related directly to Financial Markets.
Growth Mindset – Carol Dweck I am reading this a 3rd time now, and it will not be the last. My advice is read it, feflect on it, and read it again. Her theory of Growth Mindset is something which every trader should try and adapt to. We recently did a podcast on Grwoth Mindset and trading, which you can access here.
Atomic Habits – James Clear. So many people recommended this book, that I have just downloaded it and started reading it. I am unable to give a full review yet, but if it continues in anyway similar to how it has started, it is going to be exceptional. I will update this soon.
Tools of Titans: The Tactics, Routines, and Habits of Billionaires, Icons, and World-Class Performers - Tim Ferriss. This is another one of those books recommended by many people traders. The Financial Times said Tools of Titans is the perfect read for obsessives wanting to boost their productivity.
The Power of Now – Eckhardt Tolle. More spiritual than the other books, but do not let that put you off. This will have a powerful impact on you. The connection to performance will become apparent.
The 7 Habits of Highly Effective People – Stephen Covey This book is huge in the business world, but not the Financial Market world. Whilst some aspects are not so relevant to trading, do not let cause you to miss some great learnings and the overall message which will make you far more effective as a trader. It would also be valuable if you are in a leadership role or running yor own trading business.
The Art of Learning: An Inner Journey to Optimal Performance – Josh Waitzkin. This is aAnother book I have not read yet, but it has been recommended to me directly by countless Hedge Fund clients. The author uses his own amazing story to inspire people to achieve optimal performance.
Risk Intelligence – How to Live with Uncertainty. – Dylan Evans. Not many people have heard of this book, and even less have read it. It is a great book which creates pause for thought and has some great learnings and insights about living with risk and uncertainty.
The Chimp Paradox: The Mind Management Programme to Help You Achieve Success, Confidence and Happiness. – Dr Steve Peters. Steve Peter’s presents his Mind Management Model which he has used to great effect with Olympic Athletes, Top Sports People and Business Leaders. Its a terrific metaphor which really works when it comes to helping you become more effective.
The Inner Game of Tennis – Tim Gallwey. This book is self-discovery, and helping you develop and manage yourself to be more effective and relaxed when engaged in peerformance. It is similar in a way to the Power of Now.
Blink – Malcom Gladwell This book has a very positive impact on me in my trading years, waking me up to my intuitive skills, which often I had sought to suppress.
Sources of Power – Gary Klein Klein’s work inspired Gladwell to write ‘Blink’. Not as easy to read as some books, but with some brilliant perspectives on intuition in decision-making in uncertain situations.
Who Moved My Cheese – Dr Spencer Johnson This book inspired me in trading years and I always kept a copy by my trading desk. It is an allegorical book with a powerful message about goals, change and habits.
Golf Isn’t a game of Perfect – Bob Rotella Many traders have read this and advised me to read it. It is a terrific book about our desire for perfection and how it holds us back.
Breaking the Habit of Being Yourself: How To Lose Your Mind And Create A New One – Dr Joe Dispenza I have not read this but have been highly recommended it, it is now on my reading list)
The Body Keeps the Score: Mind, Brain and Body in the Transformation of Trauma – Bessel van der Kolk. Another book I haven’t read yet, but it has been recommended by a few people I highly respect. I would guess the link is that working in Financial Markets can be considered one long trauma, and this may help you get past that.
If you there are other books which you feel are worthy of adding to this list, please let me know either in the contacts section of this article or by email at steven.goldstein@alpharcubed.com
Steven Goldstein is a Performance, Team and Executive Coach who focuses on Risk and Financial Markets people and businesses.
Core to Steven's work is the belief that everyone has the potential, often latent or hidden within them, to surpass where they are and to grow into what they want to be. He views trading as two concurrent battles, one a person has with the markets and one they have with their self. To succeed a person must win both. As a coach, Steven works predominantly on helping his clients win the battle with their self.
Prior to becoming a coach Steven worked for more than 20 years as a Rates and FX trader at some of the world’s leading investment banks. See Steven's Full Profile. You can follow Steven on twitter here or on Instagram here.
The AlphaMind Podcast.
Market veterans Steven Goldstein & Mark Randall, plus the occasional guest, discuss the mental, behavioural & mindset aspects of Trading & Investing Performance. Hit these links to Listen or Download on iTunes or Buzzsprout.
AlphaMind is a joint venture between Steven Goldstein of AlphaRCubed and Mark Randall of the Mark Randall Consultancy
AlphaRCubed offers Trading & Investing Growth Performance and Development Services for private individuals and businesses involved in trading and investing activities. Underlying their approach is the idea that Traders face a battle with the market & a battle with their self. Their coaching helps traders to win the battle with their self. You can learn more about AlphaRCubed in their electronic brochure here, or via their website.
Mark Randall Consultancy offers Mindfulness based trading and coaching to people and businesses involved in Trading & Investing and beyond in the wider corporate space. MRC's unique and powerful outcome driven approach is aligned to the US Special Forces “Ultimate Warrior” Mindfitness training programme and is applied to the corporate workspace.
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