Best forex books

Best Forex trading books every trader should read

As a professional forex trader, keeping up to date and learning about new strategies and ways to improve your trading is critical to your long-term success. This self-motivation to improve and lifelong learning is actually very common amongst forex traders. We are often self-taught because of our fascination with the currency markets!

During the years, there were a couple of books that had a profound impact on how I approach my forex trading. These books were eye-openers in one way or another and were books that made me the forex trader I am today. This list of best forex books are my top recommendations for you to read and improve your forex knowledge.

 

If you’re in a hurry and just want one great book recommendation that will have the biggest impact on the way you trade, pick this one:

Trading in the Zone by Mark Douglas

It will be the best investment in your trading career you’ve ever made.

 

Note: I also wrote about the best non-trading books
that will still help you become a better trader (and improve your life!).

 

The best Forex books list:

 

1 . Japanese Candlestick Charting Techniques – Steve Nison

Steve Nison is arguably the “grandfather” of candlesticks in the Western world, he is the one deemed responsible for bringing Japanese candlestick charts (which some say go back to the late 1800s in Japan) to the Western trading world.

In his book, he gives some background on the Japanese candlestick charts and how he found out about them from a Japanese broker. Then, he quickly goes into describing all the different candlestick patterns, with well illustrated examples. The second part of the book goes into using candlesticks with other techniques such as eliott wave, trendlines, moving averages and more.

This is THE definitive book on candlestick charting and candle patterns. If you want to know more about price action, this book should be the first one to pick up. I highly recommend it. Read more.

 

2 . Reminiscences of a Stock Operator – Edwin Lefèvre

Something different now! This book, originally written in the 1920s, is a trader’s favourite, a true classic and definitely belongs in this best forex books list! It describes the life of Larry Livingston, a pseudonym for Jesse Livermore, one of the most brilliant traders in history. From his early days trying to make some money in the bucket shops to subsequently earning (and losing) his fortunes on Wall Street multiple times, this timeless tale is probably the book about trading I’ve most enjoyed reading.

What makes this book so valuable (other than that it’s just an absolute joy to read) is that it’s full of trader’s wisdoms, timeless advice that every forex trader should have in its mind every time they’re trading. Some examples: “Cut your losses quickly”, “the trend is your friend”, “Don’t trade when there aren’t clear opportunities” and more. I could probably read this book again, just by writing this review! Read more.

 

3. Technical Analysis of the Financial Markets – John J. Murpy

This book is one of the best reference works on technical analysis ever, hands down. It’s the sort of book you pick up if you want to know more about something specific, like how to recognise the most important reversal patterns or figure out how a specific indicator works. Anytime you need something related to technical analysis, it’s very likely that it will be described in this technical analysis book.

This is pretty much the bible on technical analysis and the 500+ pages in this book are pretty much the only thing you need to build a solid foundation in technical analysis. It is clearly written and covers topics such as trends, trend continuation, support and resistance, reversal patterns, moving averages, candlesticks, most major indicators, pivot points and more. There is not a better single book that describes everything like this one does. Read more.

 

4 . Trading in the Zone – Mark Douglas

This book is all about trader’s mindset. If you have a solid trading system but still find yourself losing out more than you win, this book might be for you. Trading in the Zone is a book about trading psychology, your self-worth and trading ethic, discipline, getting to know yourself and acknowledging that you might be the weak point in your trading system. After all, one of the hardest things to get right is your trading emotions, and this book lays out a mental framework to conquer these aspects of the trading business.

If you find yourself struggling in the forex market by entering trades too quickly, panicking when things don’t go your way, having emotions of fear or even excitement influence your trading, give this one a go. It might sound like soft psychoanalytical ramblings, but Mark Douglas knows what he is talking about and this book will help you become a better trader. Read more.

 

5. Trade Your Way To Financial Freedom – Van K. Tharp

Van K. Tharp is an authority on coaching people to become the best traders they can be. As an academic, he’s done years of research and has coined extremely important trading concepts like R-multiples and position sizing.

I especially like the practical nature of this book. The book will guide you step by step in developing your own trading system and doesn’t leave a stone unturned. It talks about important concepts such as profit taking, what to do if the market turns against you, etc. For traders struggling to find a system they are profitable with, this is the definite book you should read!

 

6. Trading  Price Action Trends – Al Brooks

Whereas the previous one was all about trading psychology, this book is considered by many the best book on price action, hands down. This is only the first of a three-book series, the other two dealing with ranges and reversals.

It’s not an easy book to go through though. Al Brooks covers loads of content, explaining the meaning of every single candle on the chart and the meaning of multiple candles as price action patterns. He then goes on to trends, using trend lines, channels and trend patterns to explain to the reader how to successfully trade the trend.

Digging through the book, it’s very clear that Al knows what he is talking about. If you want to get a feel of what it’s about, have a look at his Youtube channel, where he posts regular videos on his trading techniques. Read more.

 

7. Market Wizards: Interviews with Top Traders – Jack D. Schwager

This is another must-read book that belongs on my best forex books list. It’s actually not just one story, but a collection of interviews with the best traders of the business – or at least the top of around 1980s. It is chock full of timeless wisdoms that still apply today, even though the actual interviews might sound a bit dated with the advent of modern trading techniques. Nevertheless, the advice by the traders still stands, as it deals with things like trading patience, discipline, following the big trends, risk and capital management and making consistent trades.

It is a book that will make the most sense as you’ve built up some trading experience and on the one hand have no difficulties in following the conversation of the interviews, but on the other hand can relate to some of the stories of loss and what made the difference to turn around some of the traders’ routine. All in all a book with very valuable stories and rightly so a classic in the trader’s world. Read more.

 

8. Thinking, Fast and Slow – Daniel Kahneman

This fascinating book has absolutely nothing to do with trading, but it’s still relevant to this best forex books list in quite some unexpected ways. Daniel Kahneman takes us on a tour of how we think, describing our thinking as divided in 2 systems, a fast and a slow thinking system.

This book is sublime in explaining human behaviour and cognitive processes and biases, and in that way is very useful to keep in mind with relation to trading emotions and behaviour. It describes why we do what we do, why we make emotional decisions that might not always be in our best interest and what we can do to make better choices. This is a book that not only will improve your trading, but will be useful in daily life as well. A highly fascinating read! Read more.

 

9. Pit Bull: Lessons from Wall Street’s Champion Day Trader – Marty Schwartz

I only recently picked up this book on a recommendation from a friend, who said it was one of his favourite books. I can only agree. It’s just such a joy to read the stories of Marty “buzzy” Schwartz as he starts trading professionally, at a relatively later stage in life (he was around 35 I believe). The stories of his first steps in the pit of the Amex and the consecutive launch as one of Wall Street’s most successful traders ever is incredible to read and really motivates you to get your own trading in order and go for it. If you watch the documentary Floored before reading this book, you’ll definitely have an idea of how pit trading is completely different than what we’re used to these days, trading from our computers. A great story from an even greater trader, very much recommended!

 

Other books worth reading:

  • Way of the Turtle – Curtis Faith: Curtis tells about the legendary trading experiment where a group of 23 people with no trading experience whatsoever, get a set of trading rules. They proceed to make more than $30 million in a little over 4 years. A highly entertaining read, and for those curious, the original turtle trading rules are now available for free to download.
  • Flash Boys – Michael Lewis: This book is a (highly successful and cohesively written) attempt by Michael Lewis to document the rise of HFT; or High Frequency Trading. I enjoyed this a lot as a general overview of how HFT happens and what the challenges were in a trading world that completely changed not too long ago.

 

This is my personal list of best forex books. I’ve enjoyed all, mostly for very different reasons. Together, I believe they provide knowledge and insights for forex traders of every experience level, covering topics such as candlesticks, trends, trader’s emotions, price action, timeless wisdoms and background stories on trading in general. I found some were just a nice read, others were harder to digest but all of them have brought me to be the forex trader I am today, and I hope you fill find this list of best forex books equally useful!

 

Which forex trading books have you enjoyed reading the most? Leave a note in the comments!

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Felix

I'm a full-time, independent forex trader. I've been trading for over 10 years and specialize in price action trading, reversal trading, trading psychology and algorithmic trading. If you're determined to become a pro trader, I offer select consulting and coaching services. When I'm not trading, I'll either be travelling the world or rock climbing (likely both). Read my story here.

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