Mastery of advanced technical analysis is one of the factors that separates casual traders from experienced ones. Financial markets are not simple, so it’s important to understand the subtleties of price movements and chart patterns.
This FXOpen article is best suited for experienced traders who already have basic trading knowledge but are looking to delve into advanced technical analysis. We’ve compiled a list of the 7 best books to learn stock trading that explain its complexities and offer invaluable insights and strategies to potentially enhance your trading.
What Are the Best Books to Learn Stock Trading?
Typically, sketchy knowledge from blogs or YouTube videos won’t be enough to allow someone to understand and improve technical analysis. Then, people turn to reading, trying to find the best books to learn the stock market that are available.
The best stock market books are characterised by their practicality, expertise, and ability to provide valuable insights for investors and traders. They often cover a range of topics and are authored by experienced professionals in the field. Below, you’ll see a list of 7 books and their descriptions.
1. The Art and Science of Technical Analysis: Market Structure, Price Action, and Trading Strategies
Author: Adam H. Grimes
This book is a pioneering work that connects an academic view of markets, technical analysis, and effective trading. It explores why randomness dominates markets most of the time but not always. The author focuses on how technical analysis can be used to identify statistically validated patterns in certain market conditions.
In reviews of the work, readers state that the book demolishes TA misconceptions and provides insight into the psychology of market players. The book is supported by extensive research and helps readers recognise technical patterns.
2. The Definitive Guide to Point and Figure
Author: Jeremy Du Plessis
One of the top books on stock trading is the work of Jeremy Du Plessis. This book is dedicated to technical analysis and Point and Figure charting. It includes a detailed explanation of the history and development of the technique from its invention to the present day and covers the construction of graphic patterns, the reasons for their creation, and ways of interpreting them. According to reviewers, the book provides knowledge that gives you an edge. After reading it, you will no longer look at price targets and risk-reward ratios like you used to.
3. Elliott Wave Principle: Key to Market Behavior
Authors: Robert R. Prechter Jr., A.J. Frost, Charles J. Collins
This book is a worthy reference for technical traders. It gives a good understanding of the Elliott wave principle, a form of technical analysis that traders use to analyse financial market cycles and trends. It’s not for amateurs, but experienced traders love it.
The book is rather specialised as it contains material on one narrow topic, so it’s not a complete guidebook to mastering trading. Nevertheless, it’s very informative and concentrated. Reviewers note that the book teaches readers how to apply Elliott wave theory not only on stocks but also on commodities and forex markets.
4. Encyclopedia of Chart Patterns
Author: Thomas N. Bulkowski
This book is dedicated to trading on news and significant events, including quarterly earnings announcements, retail sales, and stock upgrades and downgrades. It offers empirical data illustrating the effectiveness and ineffectiveness of the patterns.
The Bulkowski Encyclopedia has been a bestseller for a long time, and now the author has released an updated, improved version and added many new patterns and strategies, as well as updated market statistics. Everything you will read in the theoretical part is backed up with figures and calculations and validated.
5. Technical Analysis Using Multiple Timeframes
Author: Brian Shannon
This is one of the books for the stock market dedicated to many aspects of trading at once. You will learn how you may enter established trends with low risk, recognise and take advantage of cyclical capital movements in all markets, evaluate the potential of a trade using technical analysis, and much more.
Reviewers mention that it provides powerful insights into how to use different timeframes to determine trends, confirm signals, and manage risk. The book is not complicated, but it is suitable for experienced traders, as it collects and systematises a huge block of information about the market.
6. Beyond Candlesticks: New Japanese Charting Techniques Revealed
Author: Steve Nison
This book provides a detailed analysis of Japanese candlestick charting techniques and how to use them in technical analysis. It discusses how to use candlestick patterns to identify trends, confirm signals, and manage risk.
Readers value its step-by-step instructions, detailed charts and graphs, and clear guidance on tracking results. Moreover, the book helps readers understand the psychology of traders in the stock market and the logic behind their decisions.
7. Effective Trading In Financial Markets Using Technical Analysis
Authors: Ashish Kyal, Smita Roy Trivedi
Along with other books in this list, the work of Ashish Kyal and Smita Roy Trivedi explains how to use technical analysis in financial markets. It covers technical analysis tools, backtesting, and algorithmic trading in detail. It teaches readers how to use technical indicators and chart patterns, confirm signals, and manage risk.
Readers say that it’s written in simple language, and there are multiple examples, case studies, comparisons, and figures for different assets and markets. Unlike many classic trading books, this work focuses a lot on the Indian market. It will be useful to those who are interested in that region.
It’s not an easy task to list the best books for trading in the stock market. If everything is clear in terms of materials for those who are just entering the world of trading, advanced books are harder to choose.
Experts say that if you already have background knowledge, you can select books that either combine and systematise information about trading or deal with one specific area in detail. The more you read, the more experience and skills you will gain. And if you want to put your knowledge into practice, you can open an FXOpen account. Log in to the TickTrader trading platform to see real-time asset charts and try out your strategies.
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