Lists of trading books you should read to increase your performance in the markets are abundant. I’ve come across them everywhere from trading blogs, to within training programs; so, I’m not going to make another one of those. Instead, I’m going to talk about 20 books that aren’t about trading, that have helped shape my thoughts on it, and aided in my success in the stock, options and Forex markets.
I once read that success leaves clues, so I find myself reading a lot of true stories about experiences that real people have had. Whether it’s a biography like I Can’t Make This Up, a sociology book about human behavior like Outliers or, yes, even a self-help book, I try to find books that will not only entertain me, but educate me, and give me a perspective I otherwise wouldn’t have.
I don’t love every book that I’ve read, but I try to take something away from each one. The small tidbit of information, the clue, that I can apply to my own life to make me a better trader and, ultimately, a better person. A lot is said about the key to mastering trading is to master ones-self, and I tend to agree.
This is why I have so many books I’m recommending – I’ve taken something from nearly every book I’ve read. That said, sometimes the lessons are more or less the same, despite coming from different books, so in some cases, I’ve grouped books together.
Lastly, these are in no particular order. If there is an order, I’d have to say it’s either A) the order that I first absorbed the lessons, B) the order of importance of the lessons, or some combination of both.
Without further ado, here’s the list of some alternative books that might help with your trading.
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The Biggest Bluff – Maria Konnikova
A lot of traders will say if you want to become a better trader, study poker. I haven’t done much of that myself, but I’ve gotten started, a bit, with this book. This isn’t an instruction manual, but rather a memoir of someone with no prior experience delving into the world of poker. An author/journalist decides she wants to learn how to play the game, so she seeks out a seasoned professional, convinces him to mentor her, and, well, you’ll have to read the book to find out what happens next.
In addition to a couple of decent poker lessons, this ultimately taught me about making the best decisions that I can with the information that I have. We’re always working with incomplete information, especially as traders, but we still need to make decisions. We can’t be paralyzed.
It also taught me focus and ignoring the noise. In a casino, there’s literal noise – other players at the table, rowdy people, slot machines – that she had to tune out to focus on the hand in front of her, her system and how other players are playing. In the markets, there’s a lot of noise as well, but our noise comes in the form of news broadcasts, social media, and indicators. While we do have to pay a little attention, we need to make sure we’re getting just the needed information and ignoring anything that can distract us or throw us off of our plan.
BlackJack Books
In my late teens, a couple of friends and I tried our hands at counting cards in blackjack. If you don’t know what that means, it’s essentially assigning a value to the cards in a standard deck, and as rounds of blackjack hands are dealt; adding and subtracting based on these values – thus keeping a “count”. This count will let you know when there’s a higher concentration of high/face cards remaining, which is when your odds of winning each hand increases.
There are a lot of gambling – professional gambling – parallels to trading. Hell, a lot of people would argue that trading is gambling, but that’s not very fair. Like gambling, you are operating in an environment where you’re dealing with probabilities, not certainties; but, unlike random chance games, like roulette or slots it’s more like poker (as I mentioned before) or blackjack.
In blackjack, if you’re able to perfect your system, and execute it without wavering, you can gain a small edge over the casino. By taking minimum losses (or sitting out entirely, if possible) while the deck has a lot of low cards, you lower your risk. And then once conditions swing in your favor, you bet more, taking larger wins that wipe out your losses and give you an outsized reward. Sound familiar? Having a system and executing it perfectly, dealing with probabilities and uncertainty and managing your bankroll and risk are all parallels between blackjack and trading.
The 4-Hour Workweek – Tim Ferris
I read this back in college but ended up leaving it in a friend’s car before I technically finished it. I’m including it in this list, though, because it’s the first place that taught me about designing my life, instead of just falling into whatever I can get, and then trying to live my life around that.
At that time, I was still trying to figure out what I wanted to do with my life. I knew I didn’t want a traditional 9 – 5, and the only roles I knew about where I’d have the freedom I’m looking for were sales roles, which do not work for me at all. I figured I’d start a business at some point, but had no idea what type of business that I would start. When I read this book, though, I learned there was a whole set of options I didn’t even know existed.
Now, I can point to influencers, YouTubers and Twitch streamers and say “look at all of these alternative income streams to a ‘job’” but there wasn’t as much of that when I was in school. If I’m remembering this correctly, Tim ended up sourcing a product (some sort of workout supplement, I believe) and creating a hands-off store, using virtual assistants and drop-shipping to create a very nice income for himself.
I didn’t really follow any of the paths that are laid out in the book, but it planted the seed that if I look hard enough, I can find something that will fit my personality, make me a comfortable living, and not be a traditional 9 – 5 role.
Whenever a friend or family member is confused about what I do or has a suggestion of what I should be doing, I think about, sure, influencers and YouTubers, but I also think back to this book and how it set me on this path.
Comedian Biographies
I grouped these into one category because when it comes to trading, I largely took the same thing away from them. They’re all great books, and I recommend all of them, but not to further your trading education; just if you’re interested in their lives.
As far as trading goes, though, these taught me a couple of things. The first is that there is no right answer. Someone who’s good at stand-up, might not be the best comedic actor. A hilarious showrunner might not be great at telling jokes on stage. Both are valid, and just because you don’t know how to do one, it doesn’t lessen your impact, skill level or credibility. At the end of the day, if you can make people laugh, that’s all that matters.
Being a self-taught trader, I find myself succumbing to imposter-syndrome often. I think that I must learn how to do everything within trading – swing trading, day trading, options, stocks, forex – for me to consider myself a trader. I feel like, if I were pressed, and I couldn’t answer every question about trading, then I’m a fraud.
But that’s not the case. I’ve found more success in some areas and less success in others. And even if there’s something I don’t know A) I can learn it, and B) I’m sure I know something another successful trader might not. It doesn’t matter if I can do all of it. As long as I’m making money, at the end of the day, that’s all that matters.
Sociology Books
This is another group of books that are roughly in the same category, and thus I took very similar trading lessons from each of them. All three are sociology books that look at human behavior and drills down, in an informational as well as entertaining way, the reasons, say, why a high IQ doesn’t automatically equal success and how we actually aren’t that good at telling when someone is lying to us.
These books taught me several things that apply to not just trading itself, but also about turning trading into a career. First: occasionally, we’re going to come across difficult problems. And to solve those problems, you might have to look at it from a different angle, put your bias aside and accept what the information is telling you, and, sometimes, testing theories once thought impossible.
They also taught me that oftentimes the people in positions of authority, or people presented as experts in a given subject probably aren’t much better than anybody else with knowledge of the subject; they just got themselves into prominent positions. Really, though, they tend to fall into the same thinking traps and human follies as the rest of us.
It’s great to learn from experts, without people sharing their knowledge, how would we learn? But we also must understand that they’re just human and they’re also prone to mistakes. We’ve got to make the best decisions that we can, and we can do so with more confidence knowing we’re not that far from the guy on TV.
Lastly, they taught me that hard work is a prerequisite to success, but it doesn’t guarantee success. I’ll delve more into that in the next section.
Business Biographies
We tend to put rich and famous people on a pedestal, believing that they’re better or smarter than the average person because they’ve achieved great things. But the truth is, they’re regular people with regular problems. They still have hopes and fears and dreams, even if they’ve accomplished something that most other people would consider a lifetime goal.
Oftentimes, it’s due more to circumstance than anything else why a person “made it”; and even more often “making it” is a singular moment – winning an award, releasing a book or movie, hitting that financial milestone – and they still have to figure out what to do next. They’re still susceptible to fear, imposter syndrome, and pressure to create something as good as the last one.
I find this information incredibly liberating. As the old saying goes “luck is when preparation meets opportunity”, and you truly get that sense by reading about these people’s lives. Yes, they worked, learned, and honed their crafts, but that’s not what ultimately propelled them into success. Something happened, they got a break or multiple breaks, that took them to the next level. What does that mean for us? Just keep working and preparing, while remaining open to opportunities as they arise, because it’s a combination of both hard work and “lucky” breaks that make us successful.
Self-Help Books
Trading is a fairly emotional endeavor. Having a large win can feel really good and taking a large loss can crush you. I know from experience. In order to ride the waves of the market without going crazy, and to stay focused on your plan without succumbing to revenge trading or panicking and jumping on a missed move requires a grasp on your emotions. Books like these tend to show you how to do just that.
A bad trade doesn’t make someone a bad trader, and, statistically speaking, there will be losing streaks. There will be times where you follow your plan perfectly, but the trade doesn’t work out. There will be times where you lose more than you expected to due to slippage, or maybe a small error in your stop order. You must understand that mistakes happen, your edge doesn’t guarantee an outcome, and you have to trust the process.
If you give up on yourself and say you’ll never make it because you made a mistake in your order, well, you’ll never make it. If you take a second and third position in falling stock, because it had a pattern and it’s “supposed to go up”, you’re going to lose a lot of money.
Self-help books have taught me different skills to recognize my emotions and see when I’m falling into some of these traps, so I can catch myself before making a mistake.
Conclusion
There you have it. 20 books that aren’t explicitly about trading or investing, but have helped me along the way, nonetheless. Let me know what you think about this list; and let me know if there are any other books that I should check out that will help as well!