These are some of my favorite books for learning how to swing trade stocks. These books cover strategies as well as the mental aspects of trading.
I have included my top picks, as well as additional books if you want to further your study.
Best Swing Trading Strategy Books
Let’s start off with some strategy books. These books provide ideas on when to enter and exit trades, as well as how to manage risk.
How to Make Money in Stocks by William O’Neil
This book contains loads of information and is a great starting point for any trader. It doesn’t cover basic things like order types, but it does provide strategies, risk management, and market analysis methods. It covers the cup and handle pattern, as well as a few others.
If someone is new to trading or investing, this is the book I tell them to read. It has a heavy focus on trading stocks that are already strong and are still acting strong. The idea being, it is easier to buy something that is already going up to make money, as opposed to trying to pick a bottom in something that is falling.
O’Neil is the founder of Investors Business Daily (IBD), a site that discusses his methods.
If you pick one strategy book to read, I’d go with this one. If you want more, then read the next ones as well.
Think and Trade Like a Champion and Trade Like a Stock Market Wizard by Mark Minervini
Mark built his own trading system based on the concepts taught by William O’Neil (book above). Therefore, there is some overlap in concepts between these books and How to Make Money in Stocks, but there is also lots of additional content and ways of doing things.
These books also touch more on the mental aspects of trading and doing what it takes to succeed.
How to Trade in Stocks by Jesse Livermore
Jesse Livermore is an almost unbelievable figure. He made incredible sums of money, but also suffered massive losses, and in the end, committed suicide. Books about him are both a testament to his methods for making money, and the importance of the mental game (discussed next). This book outlines his trading approach.
I read a book called Reminiscences of a Stock Operator by Edwin Lefevre once every couple of years. It is about Jesse Livermore, although a fictional name is used in the book. Also a worthwhile read!
For information on how various people trade, if you are unsure what and how you want to trade, check out the Market Wizard book series by Jack Schwager.
More into videos? Check out my Complete Method Stock Swing Trading Course. A practical approach to trading explosive stocks.
Books to Compile the Information / Creating Trading Plans
Trade Your Way to Financial Freedom by Van Tharp
Once you start reading books/watching videos and gaining some trading knowledge, you will have lots of ideas floating around in your head. At some point, you need to condense those ideas (and discard many of them) and formulate your own specific way of trading. This book guides you through the process of doing that. Read some books, get some ideas, but the quicker you define your own trading plan and start working on only executing that plan, the better off you will be.
The above book is pretty in-depth, if you are new and want something a little easier to digest, check out the book by Super Traders by Van Tharp first.
Best Books for Trading Psychology – The Mental Game
Trading is almost entirely mental, because everything we do, even how we learn and interpret things, is filtered through our own unique brain (that holds different beliefs, values, and experiences than others). A great trading method doesn’t matter if we don’t have the discipline to follow it, and a poor trading system could be turned into a great system by someone with the motivation and focus to improve it.
Working on the mental game is even more important than working on strategies. You may decide to learn strategies first, which is what most people do, but eventually every trader realizes they need to get their head right too.
Trading in the Zone by Mark Douglas
If you read this book when you start trading, you may think “This guy is crazy, there is no way trading involves all this emotional and psychological stuff.” But trade for any length of time and you will see how much your psychology affects you. Mark provides a roadmap for what you are likely to experience and highlights ways to overcome adversity while trading.
If you only get one book on trading psychology, make it this one.
Trading Beyond the Matrix by Van Tharp
This book will make you think and dig deep, not just about your trading but your life. Some parts might be a little out there for some, and it does get spiritual, but the overall goal is to create the internal resources needed to succeed.
Beliefs – Pathways to Health and Well-Being by Dilts, Hallbom, and Smith
If you feel like digging deeper and exploring additional ways to overcome mental obstacles, this book provides that. I learned about this book in Van Tharp’s (book above) Performance 101 Workshop.
This book doesn’t talk about trading, but it does talk about how to change our beliefs to change our lives. Consider for a moment if you were brought up in a household where money caused a lot of fights and struggles. There will be beliefs about money, possibly some negative, which may cause issues anytime things start to go your way (make money) in your trading. This book is about finding and changing beliefs that don’t serve us in our life’s work.
Some Other Books to Improve Thinking
The following books delve into other topics. They aren’t really psychology or trading, but these resources are important for noticing errors in how we think about certain things.
The Art of Thinking Clearly by Rolf Dobelli
99 chapters, each only one to three pages long. Each chapter provides an insight into how we can get confused, biased, or make poor judgments/decisions.
Being aware of issues discussed in this book will help with assessing a good trading system from a bad one, and filtering out bullshit from various sources.
The next two books are my favorite books on statistics. These books provide a basic understanding of statistics, as well as how they can be used to conceal the truth or push an agenda. Things we all need to be aware of because we are inundated with statistics every day.
Don’t let the word “statistics” scare you. These books provide anyone with a better understanding of the world we live in, in a simple, entertaining, and easy to understand way.
How to Lie With Statistics by Harrell Huff
A humorous, simple, yet very clever book (with lots of cartoon pictures) on how statistics work and how they can be manipulated. It is not a text book, it is not math-heavy, it just provides a way to understand the world better.
The Drunkard’s Walk – How Randomness Rules Our Lives by Leonard Mlodinow
Part history and part fascinating anecdotes, this book will make you sit back and go “Wow” as you read it. This book, and the book above, take you on an easy to understand journey into a vast and captivating field. This book will make you think of the world in ways you never thought before.
Final Word on Best Books For Swing Trading
There are lots of great trading books out there. These are just some of my favorites, and they have all shaped my swing trading or how I view the world in some way. Ultimately, each of us is unique, and we each need to develop our own method and style of trading that suits our lifestyle, time constraints, and personality. These books provide a great starting point for doing that. Some provide actual strategies, others provide insight into trading that strategy well, and some books help us filter the bullshit that is constantly fed to us.
If you have some other books that really helped your trading, drop a line in the comments.
And while it is not a book, my Complete Method Stock Swing Trading Course covers everything from stock market basics, strategies, market analysis, risk management, position-sizing, and how to improve as a trader, all in an interactive video format.
Cory Mitchell, CMT