Emotions and Discipline

The topic of the trading psychology is often overlooked by many traders and authors. Meanwhile, emotions play one of the biggest roles in all financial markets. Traders without discipline fail even with the perfect entry and exit systems. Self-discipline is required to successfully follow your strategy, to adhere to the risk and money management and simply to stay up-to-date with the latest market news and events. Here you will find the books that can help you understand your trading character and turn your emotions from your enemies to your friends.

The New Sell and Sell Short by Alexander Elder

The New Sell and Sell Short: How To Take Profits, Cut Losses, and Benefit From Price Declines is a 2nd edition of his not very popular trading book titled Sell and Sell Short. This one is timely piece of trading education that can be of a great help during current times of recession and bearish markets out there. If you’ve read some of the best-selling books by Alexander Elder (which I strongly recommend doing): Entries and Exits, Trading for a Living, Come into My Trading Room, you should already know that Dr. Elder knows what he’s talking about and knows how to tell it to the traders, so that they would learn something really useful and helpful. This book unites his emotional and psychological studies with the most sophisticated trading methods to create a strategy to trade by selling and selling short. Of course, not everything here can be applied successfully to Forex market, but it still contains many lucrative lessons for all types of traders.

The Daily Trading Coach by Brett N. Steenbarger

The Daily Trading Coach or 101 Lessons for Becoming Your Own Trading Psychologist is a trading psychology book written by a clinical psychologist and active trader — Brett N. Steenbarge. The author is famous for his writings on psychology of trading. The book is assembled in form of lessons (with exactly 101 of them), each showing some important self-discipline practice or a trait that can be used in trading. The Daily Trading Coach can be recommended to all traders, disregarding the experience level, as this book can really improve one’s market performance. It won’t teach you trading, but instead it discusses everything related to discipline and emotions: from the process of practicing in trading to coping with stress to self-coaching processes. Of course, you have to be quite open-minded and eager to work on yourself if you want to benefit from this book, but it’s definitely worth both that and its price.

Super Trader by Van K. Tharp

Super Trader (Make Consistent Profits in Good and Bad Markets) by Van K. Tharp is a complete-guide type of book that tries not to be specific in regards of particular markets but rather shows what are the components of a successful trading strategy and, more precisely, a real Super Trader. If you’ve read Tharp’s previous book Trade Your Way to Financial Freedom, you should know that, although he isn’t a professional trader, Tharp is a great coach in trading. He studied a lot of successful systems and traders and knows what it takes to become one of them. This book will show you how to prepare yourself psychologically, how to develop a good trading plan and then a trading strategy, how to use the position sizing properly and finally how to avoid the popular mistakes in trading. Super Trader can be called a must-read for traders of all markets.

How To Become A Successful Trader by Ned Gandevani

How To Become A Successful Trader or The Trading Personality Profile: Your Key to Maximizing Your Profit With Any System is a trading psychology book by Dr. Ned Gandevani — a Ph.D. in finance and a specialist in trading behavior. With the information presented in this book you will be able to select a strategy or modify some existing system that will be best suited for your personality. All traders are different and what’s good for one isn’t necessarily good for another. Personality-fitting is an important step in any system development. As a trader you are going to spend a big share of your time following the rules of your system — that’s why you’ll want those rules to be in perfect harmony with your psychological traits. How To Become A Successful Trader can be recommended to traders working in all sorts of markets — Forex, stocks, options, commodities, index funds or any other financial market available.

Trading in the Zone by Mark Douglas

Trading in the Zone is a trading book dedicated to the psychological training of a trader. According its author, Mark Douglas, trader’s mindset should be significantly different than a common real-life mindset. The greatest profits are made in financial trading only by those who switch their minds to a completely different way of thinking that would allow them to overcome some of the biggest problems — the psychological problems of trading. Those problem include: the unwillingness to create any rules for trading, failure to take responsibility for the own steps, addiction to the random rewards from the market, giving oneself to the extern control of the trading rather than the internal control of self. Trading in the Zone is the in-depth look at the challenges that every trader faces daily and that the majority of traders fail to overcome and lose their money and waste their time.

Enhancing Trader Performance by Brett N. Steenbarger

Enhancing Trader Performance — a second trading related book by a professional financial trader and psychologist Brett Steenbarger. In this one he offers several interesting techniques of enhancing a trader’s performance by improving his approach to trading and making money on markets. In the series of real-life examples Brett shows how expert traders distinguished themselves from the average traders through their organized and systematic approach to their profession. The gaining of competence and building a working method of sustainable strategy developing are show in this Forex book. The trader’s success is seen as not something constant in this book, but only constant self-improvement and enhancing of the one’s trading methods can bring a real success. The last two chapters of the book include cognitive and behavioral techniques for enhancing the performance.

The Disciplined Trader by Mark Douglas

The Disciplined Trader is trading psychology book that describes the methods of becoming the disciplined financial trader and stop losing money just because our emotions take control over the mind. It also describes what the discipline in trading is and why is it very important in every financial market, including Forex, stocks, options and others. Mark Douglas is a CEO of a trading software development company and he has a very rich experience in trading. According to him, more than 80% of trader’s success is concentrated in psychology and his treatment of the emotions. This book can serve as a step-by-step guide to adapting successfully to the unusual psychological characteristics of the Forex trading. You will learn to understand the psychology of trading and the importance of personal psychological transformation.