I am often asked about my top recommended Forex trading books, and this post is my answer to those queries.
The following books are not technical, and most of them don’t contain specific ‘how-to’ instructions.
Instead, they’ll shift your trading paradigm, which is much more valuable to your growth as a trader.
So without further ado, and in no particular order, these are my top 5 recommended Forex trading books.
My Top 5 Recommended Forex Trading Books
1) Fooled by Randomness
This book fundamentally changed my perspective of, and ultimately my approach to, the “arcane” art of trading.
The main topic of the book revolves around the question:
How can we tell if trading success is due to skill, rather than luck?
Consider a group of 10,000 traders, with each trader having a 50-50 chance of making or losing 15% in any year.
At the end of each year the losing ones are kicked out of the game.
After the first year, 5,000 traders would have made money.
After seven years there would be 78 traders who were profitable every single year, and made a return of more than 105%… And yet all of this is due to random chance.
If these folks then go off and start their own hedge funds, they’d probably attract a lot of investors. People would not know that their trading “skill” was entirely based on luck.
This dilemma is a central tenet of my trading philosophy today, and is what ultimately led to my seach for a trading edge.
While I don’t necessarily agree with all the conclusions of the book, many of the concepts in it have fundamentally changed my perspective of trading.
This is a book that will make you think – I found myself pausing at various points to process the ideas I was reading about.
Some people find Taleb to be arrogant, but I personally found his writing to be refreshing and humorous. It’s rare to find a book that is both educational and enjoyable.
This is a book I’ve re-read multiple times over the years, and even today I’m still walking away with new insights every time I pick it up.
For less than $20, this book is one of the best investments I’ve made in my trading education.
2) What I Learned Losing a Million Dollars
This book has one central lesson to teach, and it’s a crucial one.
I won’t spoil the book by telling you what it is, but I’ll say this: The lesson itself isn’t new, but the way its explained, is.
And that makes all the difference.
In the first few chapters I found myself thinking, “yeah, yeah, I know this already”…
But further into the book, the author explains how he came to the conclusion. And that was the game-changer that clicked a few things together in my head.
I caught myself thinking, “wow, I’ve never thought about it in that way before… now it makes so much sense! I finally get why it’s so important to __________.”
You might have heard the saying: Your trading strategy isn’t really important.
If you don’t understand why this is true, read this book.
3) The Obstacle is the Way
Trading is hard, and it’s a lonely path.
After a devastating period of losses, I was feeling depressed, stuck, and all but ready to throw in the towel.
By some miracle I came across this book, and it changed everything for me.
It got me to view my struggles in a different light, which enabled me to pick myself up and keep going.
It would not be exaggeration to say that this book saved my trading career.
If you’re having a hard time in any aspect of your life (not just in trading), I can’t recommend this book highly enough.
4) Atomic Habits
One of the things that separates winning and losing traders is what they focus on.
Losing traders tend to focus on the money (the goal). They think that making money today means that they are trading well.
Winning traders, on the other hand, focus on their trading operation (the process). They are more concerned about making good decisions, than the immediate outcome of those decisions.
In this light, the ability to build good trading habits is a highly valuable skill.
As the saying goes: You don’t rise to the level of your expectations. You fall to the level of your training.
There are many ‘habit building’ books out there, but I find this one to be most effective in getting me to develop and maintain productive trading habits.
5) Trading in the Zone
As a newbie trader, you won’t find a better book on trading psychology.
Personally, I find the most valuable lessons of this book to be centered around how to manage one’s trading emotions.
This book got me to realize how easy it is to be trading emotionally, even though I think I’m trading rationally.
If you want to understand yourself better as a trader – and improve your trading process – this book is a must read.
What are the books that made the biggest difference to how you trade?
Which trading books do you think all traders should have on their bookshelf?
Let me know in the comment section below.