Earn Money by Day Trading: 8 Books you should read

July 26, 2021

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Are you looking to earn money by day trading in stocks, options, currency etc ? Here is a list of books you must read before you take the dive. From candlestick charts, trading strategy to psychology of trading, this list includes the best books you can find on the subject.

1.Trade Your Way to Financial Freedom

The book covers topics like stop-loss, how to take profit, and how to position size. If you have a good general understanding of investing and want additional exposure to risk management and short-term trading concepts , then this is probably a good resource for you. Trends, breakouts, band trades are covered in some detail. Also you learn about money and risk management in detail. First edition of the book was written in the 1998 and many of the examples may not be relevant.

 

2. The New Trading for a Living: Psychology, Discipline, Trading Tools and Systems, Risk Control, Trade Management

This is second edition of the book ‘Trading for a Living‘ . It emphasises risk management along with self-management and provides clear rules for both. The book approaches the subject from both a psychological and technical viewpoint. On the technical side, author examines various indicators like  MACD and Moving Averages and concepts like ‘value zone’ in which one buys between the 13 and 26 period moving averages. This book overall is a mix of 3 components – technical, psychology of trading and a process to systematise your approach

 

3. How to Day Trade for a Living: A Beginner’s Guide to Trading Tools and Tactics, Money Management, Discipline and Trading Psychology

This concise book explains the fundamentals of day trading, how day trading is different from other styles of trading and investment, and important trading strategies that many traders use every day. Different trading techniques like ABCD Pattern Trading, Bull Flag Momentum Trading, Top Reversal Trading, Bottom Reversal Trading, Moving Average Trend Trading, VWAP Trading, Support and Resistance Trading are given.

This book is to the point, practical, simple and plain without any jargons ( And also cheap) Only Rs 99/- at the time of writing this article on Kindle.

 

4. How to Make Money in Stocks: A Winning System in Good Times and Bad

There’s value investing (like Warren Buffet), there’s day trading, swing trading, and then there’s growth investing. This book is about growth investing. William O’Neil’s Investing System is a 7-step process for minimizing risk and maximizing gains- finding companies that show exceptional earnings and sales growth and knowing when to buy them and when to sell them. It’s a rules or process based system which an investor/trader has to follow. This book doesn’t talk about the psychological aspect.

 

5. Market Wizards: Interviews with Top Traders

Do you listen to “experts” and chase trading fads instead of doing the hard work of developing your own methodology. Do you focus almost all your energy on determining trade entry points but ignore the more critical questions of trade exit and risk management. Then this book is for you.

This is an old book, more than 30 years since its first edition. Many top traders have grown reading this book. Nassim N. Taleb says about this book

“I’ve read Market Wizards at several stages of my career as it shows the staying power of good down-to-earth wisdoms of true practitioners with skin in the game. This is the central document showing the heuristics that real-life traders use to manage their affairs, how people who do rather than talk have done things. Twenty years from now, it will still be fresh. There is no other like it.”

 

6. How I Made $2,000,000 In The Stock Market

From the first edition in 1960, this book remains a classic stock market text to this day. The book describes the unique “Box System”, which author used to buy and sell stocks. The author with no training was able to establish his own stocks trading strategy. Humility, Persistence, and ownership are key features of this book. Available at only Rs 29/- at the time of writing this article, you should not miss this one.

 

7. Pit Bull: Lessons from Wall Street’s Champion Day Trader

This book is a personal story of a trader who made his start and then went on to make millions and become one of the best speculators in the world. This book doesn’t teach how to trade but more of author’s life lessons that you can use. You can learn from his early failures and successes.

This book is named Pit Bull because  Schwartz counts himself as a ‘street kid’ – i.e. someone from an ordinary background. The combination of a sharp mind, a strong work ethic and the discipline and ability to stay calm under fire combined made him a successful trader. The book is a nice read and you would relate to him if you are a successful trader yourself.

 

8. Trading: Technical Analysis Masterclass: Master The Financial Markets

The book is a good beginner’s guide to day trading and understanding charts and different formations. This book focuses on technical analysis, explanation and interpretation of price movements and chart patterns as well as on learning effective, ready-to-use trading strategies. The first section of this book provides comprehensive knowledge of the fundamentals and individual components of technical analysis and price analysis. The second section focuses on the most important trading patterns as well as the correct interpretation of chart formations.

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