10 Best Books on Intraday, Swing, and Options Trading
- Profile Traders
- Sep 25, 2020
- 17 min read
Updated: Feb 21, 2022
When it comes to learning about Trading and Investment, the internet provides plenty of options. Besides, Amazon has millions of books on the topic of ‘Stock Market Trading.’ However, it’s tricky for beginners and intermediate-level traders to find good books on Trading and Investment.
Here I have compiled a list of some of the best books that can guide anyone looking to boost their Trading or Investment skills. So, be with me for the next few minutes for the insight and short review of all these books.
Contents:
11 - Bonus
12 - Summary
|Also Read: Top 10 Most Influential Books to Change Your Life
Popular Topics
This book is recommended for all types of traders.
This book is ranked #1 on my list of 10 must-read books on the stock market. I have multiple versions and copies of this book. It is written by Edwin Lefevre and can be described as a fictionalized biography of Jesse Livermore, one of the most famous and debated traders of all time.
Jesse was known as "Boy Plunger" for his ability to make money in the bucket shops. Later, he also got the title "The Great Bear of Wall Street" as he made several million dollars during the 1907 and 1929 market crashes. He was carrying a massive short position during the 1929 crash and made over 100 Million Dollars, which is equivalent to 1.5 Billion in today's dollars.
Jesse started his carrier as a quotation board boy in a broker office. He was fascinated by the price fluctuations and maintained a diary to log his observation every day. It's only after receiving a "hot tip" from a colleague; he jumped into betting in bucket shops to put his theories into practice. Very soon, he started making good money in bucket shops, and all of the bucket shops banned him. Left with no choice, he moved to New York and created havoc many times on Wall Street.
During his stint at the initial stage, Jesse experienced both wild successes and massive failures. He was a contrarian in some of the approaches and looked at markets in many ways that others simply did not understand. Jesse made a fortune on trades that are placed before the earthquake in 1906. After this incident, he became a known figure on Wall Street.
Even though it's a century-old book, the advice which is present in the book is still relevant today; after all, whatever happens in the stock market today has happened before and will happen again.
One of the book's lessons is that Jesse made money when he followed his own advice and lost it when he followed others.
Jesse is considered a great trader of all time. There are many debates over his death and fortune at the time of death. Besides, his trading style (going bankrupt a few times) may not get the nod from investment giants like Warren Buffet, Charles Munger, and John C. Bogle. However, this book is a must-read book for all the traders because of the many remarkable lessons. It's also a fascinating guide to the psychological aspects of trading. I have copied some of the lessons here:
10 Quotes from Reminiscences of a Stock Operator
- There is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.
- I always made money when I was sure I was right before I began. What beat me was not having brains enough to stick to my own game — that is, to play the market only when I was satisfied that precedents favored my play.
- They say there are two sides to everything. But there is only one side to the stock market, and it is not the bull side or the bear side, but the right side.
- A man cannot be convinced against his own convictions, but he can be talked into a state of uncertainty and indecision, which is even worse, for that means that he cannot trade with confidence and comfort.
- The big money in booms is always made first by the public-on paper. And it remains on paper.
- There is nothing like losing all you have in the world for teaching you what not to do. And when you know what not to do in order not to lose money, you begin to learn what to do in order to win. Did you get that? You begin to learn!
- It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine--that is, they made no real money out of it. Men who can both be right and sit tight are uncommon.
- Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.
- No man can always have adequate reasons for buying or selling stocks daily - or sufficient knowledge to make his play an intelligent play.
- A stock operator has to fight a lot of expensive enemies within himself.
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This book is recommended for intermediate-level traders to experts in trading.
In this book, Douglas uncovers the underlying reasons for the lack of consistency. He also highlights some of the habitual problems rooted in the subconscious mind, which triggers losing trades. Besides, he also offers the methods to face them in the best way possible.
Douglas draws on years of experience in futures trading and coaching professionals about making money in the market. His book contains so many valuable lessons that it’s difficult to summarize all of them in a single post, so let me focus on the essential points.
The first such habit is an addiction that new traders experience when they can get decent profits from a random trade. Due to this, many expect to get a random winning trade now and then, without much consciousness about the losing streaks and overall market conditions. The recorded memory in the subconscious mind of that great moment where luck struck in 1-2 profitable trades, motivates to keep trying.
Another major problem why even smart people fail in trading is their reaction to a given loss. Nobody likes losing money in any venture, and when it happens in trading, it always impacts anyone’s behavior. In trading, one has to realize there is a probability of taking a loss. A trader needs to understand that this risk is part of the business; accepting it and keeping it minimal makes you on the right path to get success in trading and avoid spontaneous reactions, which are mainly driven by uncontrolled emotions from the mind.
The next major issue is about our emotions when an excellent trading opportunity is missed. Our compulsive ego pushes us to chase those missing moves, and we end up with many unnecessary trades. Besides, a trader also needs to consider the risk for every trade.
This book revolves around these issues; it explains how these issues can trouble us and offer many solutions to overcome them. Always remember, emotional control is vital in trading; without it, even the best technical analyst will be lost. It’s not about what you trade or how you trade. It’s all about how to think when trading. And, how not to think.
My favorite quote from the book is:
“Ninety-five percent of the trading errors you are likely to make — causing the money to just evaporate before your eyes — will stem from your attitudes about being wrong, losing money, missing out, and leaving money on the table. What I call the four primary trading fears.”
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This book is recommended for positional traders, long-term traders, and investors.
This book tells the story of Nicolas Darvas, who made 2 million dollars in the stock market within two years. Darvas is not a professional investor but a dancer. He is Hungarian by birth, but he fled to Turkey at the age of 23, with forged papers. He begins his career as a dancer and he was also reading many books on trading.
Darvas’ trading journey begins when he gets 3000 shares of RILUND from the show managers. He had forgotten about these shares, and one day when he checked the price in a newspaper, he realized that he made an 8000 dollar profit. He sold everything and made up his mind to take trading very seriously.
Darvas invested his money in a few stocks that had been hitting their 52-week high. He was pleasantly surprised that these stocks continued to rise above a 52-week high level and later sold them to make a large profit.
He names his trading system as the ‘Box Theory.’ It relies only on price action and the volume of trading. He represented each stock as moving from one price box (for instance, 30-35) to another price box (35-40 and higher levels). Some stocks are moving down, but some stocks are crossing boxes to set themselves up in the next higher level box. He was only interested in those stocks, and he used to accumulate when a stock moved to a higher-level box.
He was using a stop-loss order to sell if the stocks went down to the lower box. He used to trail these stop-losses whenever a stock advances to the next level box. The most surprising thing was while he was traveling around the world for his dance show, he used to communicate only by telegrams with his broker. In this way, he made 2 million dollars within 2 years!
The book is very well written, and his story is interesting. Since it is written as a narrated story, it is easier to read than many other trading or investing books.
My favorite quotes from the book are:
“I have no ego in the stock market, if I make a mistake I admit it immediately and get out fast.”
“If you could play roulette with the assurance that whenever you bet $100 you could get out for $98 if you lost your bet, wouldn’t you call that good odds?”
“I never bought a stock at the low or sold one at the high in my life, I am satisfied to be along for most of the ride.”
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This book is recommended only for investors.
Peter Lynch is an American Investor and a former fund manager. He was the manager of the Fidelity Magellan fund between 1977 and 1990. During his tenure, the Fidelity Magellan Fund's size increased from $ 20 million to a whopping $ 14 billion, and he generated an annual return of 29% for his investors and beat the S&P 500 index in 11 out of 13 years.
Peter Lynch popularized the term "Multi Baggers." In this book, he gives many bits of advice about how an ordinary person can get great returns using "3% of the brain" and "mathematics learned until 4th grade". This book is divided into three main categories: Preparing to invest, Picking Winners, and The Long term view.
Preparing to invest
Peter came from humble family background and worked in a golf course. He explains how a common man can take advantage of investing in stocks, which they know for a long time. For example, a doctor has a good knowledge of pharma companies and knows which medicines are doing great for patients. With little research, he can easily come up with a list of a few multi-baggers from the pharma sector.
Peter highlights the importance of conviction in investing. The lack of conviction forces amateurs to sell the stocks precisely at the wrong times and think of them as significant investors when they are not.
Picking winners
Peter explains his stock-picking ideas in the second section of the book. He advises each investor to do his own research before investing in any stock. This section explains what stocks to be avoided, the importance of earnings, and many more with his six categories of classification of stocks. He also gives a checklist for selecting stocks in each of the six categories of stocks.
The Long-term View
In this section, Peter focuses on designing the portfolio. He advises small investors to keep three to ten stocks in their portfolios. He also explains the best time to "Buy" and "Sell" stocks in this section. A simple example of buy is during the year-end tax selling by institutional investors.
My favorite quotes from the book are:
1. ‘Only invest what you could afford to lose without that loss having any effect on your daily life in the foreseeable future’.
2. Do not try to predict the economy. A great many personalities have failed. Predicting the economy is futile.
3. Large profits can be made in the stock market. Large losses can be made in the stock market.
4. ‘If you want to avoid a single stock, it would be the hottest stock in the hottest industry’. Boring stocks give the best results.
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|Also Read: Is Investing in Stock Market is Good Idea?
This book is recommended for day traders, scalpers, and short-term traders.
JAMES DALTON has been a pioneer in popularizing the Market Profile, a unique method of identifying short-term trading opportunities. This book is a feast to day traders and short-term traders.
Market Profile is a technical concept with a unique charting technique developed by Peter Steidlmayer when trading at the Chicago Board of Trade (CBOT), and it was open to the public in 1985.
Market profile assists the short term traders to read the current market trends as it unfolds. It might look like a pretty complicated alphabetic model for a beginner to show the distribution of market data along with price and time axes. But trust me, it is straightforward and gives an edge over other traders. This book provides a framework that helps translate market information into actionable ideas and builds confidence in the trader's decision-making process.
The book is organized according to the trader's achievement level—novice, advanced beginner, competent, proficient, and expert. More efforts have been shown for the competent level. Market Profile is different from any indicator. It will not show any buying or selling signals, and a trader should study the market dynamics through the market profile to make his trading decisions. This book provides a detailed explanation to understand market dynamics.
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This book is recommended for all types of traders and investors.
"Trade like a casino" sounds like a fantastic idea. That's why I like the book by Richard Weissman!
Do you know what casinos do? They have a strategy to ensure that they are going to have an edge in the long-run. Any casino will not win every poker game. But their system will overcome any temporary setbacks in the long run.
In the stock market field, all profitable traders tend to share one unique character. They all have a system that they believe will prove profitable over the long run and are happy to accept short-term setbacks. This book provides a detailed explanation about identifying such good trading systems and executing them over a long period.
This book reveals that successful traders operate similarly to a casino. They develop a method that gives "positive expectancy" and implements the volatile market conditions process without showing any emotions. The exciting thing about the author is that he emphasizes a lot on research and backtesting. That allowed him to develop mechanical trading systems, and then he can use them with a positive expectancy.
This book explains how to get the casino's edge with the below parts:
· It reveals how many successful traders tend to follow the same general principles, even if their trading style is different
· It explores how to possess ownership and responsibility for your trades when the market moving against you
· It discusses how to develop an approach that combines trade selection with sound risk management, avoids emotional attachment to positions, and focuses on market movement
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This book is recommended for long-term traders and investors.
Stan Weinstein is a famous technical analyst. He could not contain the discoveries he has made on becoming successful in investing in the financial markets using one constant technique and wrote an entire book to spill the beans.
It is a good book in many aspects:
1. It presents a simple concept of investment in an organized manner with many examples.
2. There are quiz questions at the end of each chapter that tests the reader’s understanding.
3. It presents a complete system for trading- which includes entry, exits, stop-losses, etc.
4. It introduces the key concepts of a trading system without cluttering the material with lots of examples.
To summarize the book content, Sam Weinstein suggests five essential tools to analyze the individual stock.
1. Obstacles in the stock’s path – for example, nearby resistance zones for a long position.
2. Performing better than the market index and improving linearly. He uses Relative strength (relative to the market, not the RSI) to get this point.
3. Stock moving into an uptrend. He suggests using Stage analysis using a 30-week MA.
4. Stock breaking out of resistance. Support and resistance points using horizontal and trend lines.
5. Volume confirmation is necessary. It can be identified by checking a significant increase in volume on breakouts.
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This book is recommended for long-term traders and investors.
This book, written by William J. O'Neil, is one of those books which gives a new dimension towards investment topics. It is useful for people who like to invest and hold stocks for the long term. If you are looking to find a book on short-term trading, then it may not suit you.
One can pick growth stocks that have significant earnings and revolutionizes the world with their products and services. That is the key theme of this book.
How To Make Money In Stocks teaches you to find the next Amazon, Apple, Google, Netflix, Microsoft, and Facebook. You will discover the best method to find these stocks in this book.
The CANSLIM Method
In searching for the big winners, the author has boiled down his stock searching formula to CANSLIM. It stands for:
C = Current Quarterly Earnings per Share.
A = Annual Earnings Increase
N = New Products, New Management, New Highs
S = Supply and Demand, Shares Outstanding plus Big Volume Demand
L = Leader or Laggard
I = Institutional Sponsorship
M = Market Direction
It’s tough to explain the entire CANSLIM technique in this article. But if you are interested, you can find more details on Investors.com articles on CAN SLIM.
Nowadays, Cup and Handle is one of the famous chart patterns. It was William O'Neil who made this pattern very popular. It is a bullish chart pattern, and you can often find this pattern in many stocks that are about to give a big move in a quick time.
Along with weekly charts, this pattern also appears in the daily chart, the hourly chart, and even intraday charts such as the 15 min charts. Hence everyone in the market can take advantage of this beautiful chart pattern, from investors to day traders.
One of the CANSLIM method components is the “M,” which stands for Market Direction. This book highlights the importance of checking the direction of major indices every day. Usually, 75-80% of stocks follow the direction of the market; hence it makes sense to study the major indices each day.
The US's major indices are the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite Index. Similarly, the major indices in India are Nifty, Sensex, and Banknifty.
The book's only small drawback is that it does not give enough detail on how to identify a bear market, a market top, or the end of a downtrend. But you can read my article ‘Is Investing in the Stock Market Is a Good Idea?’ to get these missing details.
This book tells you that the stock market is dominated and led by certain industry groups or sectors every decade. For example, in the late 90s, internet stocks dominated the market. It is one of the best investing books, and if you are serious about investing, you must read it.
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This book is recommended for day traders, scalpers, and short-term traders.
The author of the book is Andrew Aziz. He tells his own trading story, which can be relatable to many fresh day-traders in the current market conditions. In his initial days of trading, Aziz got lucky with a pharma stock that earned him $6,000 in a few minutes.
However, very soon, he managed to lose it all. Since he did not yet have the necessary knowledge to take only profitable trades and avoid unnecessary trades, he uses his own experience as a cautionary tale for all the people who are just starting with intraday trading.
Aziz has a very precise and accessible writing style that makes this book a super helpful and easy guide for beginners in day trading. Some of the statements I liked the most are:
Success in trading is not a revolution. It is an evolution!
Day trading is not a strategy to get rich quickly.
Day trading is not easy. It is a serious business, and you should treat it as such.
Day trading is not the same as gambling or playing the lottery.
The most common reason people fail in day trading is that they do not regard it as a serious business.
By reading this book, one can learn:
1. The ways to start intraday trading as a serious business
2. Methods to identify good stocks
3. How to select a good dealer
4. Essential devices and platforms required for intraday trading
5. Mechanical rules for creating significant intraday strategies
6. Algorithm of developing and executing a trading plan.
|Buy the best book on Intraday Trading here.
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|Also Read: The Complete Guide to Intraday Trading - Platforms, Strategies, Systems, Rules, and Books
This book is recommended for all types of traders.
I was very skeptical about reading this book. But once I finished reading this book, I become a fan of this book.
Let me explain my reasons.
Have you ever taken a chart in Tradingview or Zerodha and:
· Removed all of the MAs and other overlying indicators?
· Removed all the underlying indicators like RSI, Stochastics?
· Even removed the volume?
Do you think you would be able to trade?
It might look impossible, but don’t forget most of the indicators derive their existence from one thing – ‘PRICE.’
A fluctuation in the price will also bring variations in those indicators. Isn’t it?
Then which is better to study? The PRICE, or Indicators?
Laurentiu Damir takes an in-depth dive into analyzing the price patterns on charts in a unique way. I have not seen a few concepts that he describes anywhere else.
After reading the book, one thing will be clear:
You will not look at the chart in the same way you had before.
By dismissing the need to memorize many technical patterns and incorporate concepts of value, one can become more flexible and less rigid with your technical analysis.
The fascinating thing about Laurentiu Damir is:
- He doesn’t have a website, and he doesn’t sell anything (except this book)
- His only online presence is on Twitter, with just 496 followers (at the time of writing this post)
- He is a Forex trader who lives in Romania (or any nearby European country)
English is not his first language, and it is visible in this book. But it’s almost negligible as compared to the content and value present in the book.
If you are a pure price action trader, just go for this book. I promise you will not regret your decision!
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Bonus
Below are few other books for traders and investors which are also worth checking out. (Although this article is about 10 must-read books, I cannot miss mentioning these books here).
The Intelligent Investor by Benjamin Graham
How to Make Money Trading with Candlestick Charts by Balkrishna M Sadekar
How to Avoid Loss and Earn Consistently in the Stock Market by Prasenjit Paul
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|Also Read: Top 10 Most Influential Books I have Read in My Life
Option Trading Book
Recently I read the "Definitive Guide To Advanced Options Trading" book and it is one the best books on Options Trading.
Summary
Here is a quick recap of all the books mentioned above.
Feel free to share it with your friends.
Books Amazon Link
Reminiscences of stock operator Buy Now
Trading in the Zone Buy Now
How I Made $2,000,000 in the Stock Market Buy Now
One Up On Wall Street Buy Now
Mind Over Markets Buy Now
Trade like a casino Buy Now
Stan Weinstein's Secrets For Profiting in Bull and Bear Markets Buy Now
How to Make Money in Stocks Buy Now
How to Day Trade for a Living Buy Now
Price Action Breakdown Buy Now
(Paid Links)
That’s all for this article.
I hope that this article is useful to readers. If you think I missed any important book or if you have any recommendations for any additional book on the list mentioned above, please comment below.
I will be happy to read it and write a review about it.
(As an Amazon Associate we earn from qualifying purchases)
One can also read my book "Price Action Trading" on Amazon.
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