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Swing Trading

Top 10 Day Trading Books

This article lists the best day trading books. There are many good trading books and I have compiled a list of the top 10 day trading books in my opinion. What exactly is day trading? Day trading is when you buy and sell securities within a single trading day. Although day trading can occur in any marketplace, it is most popular in the forex and stock market.

To be successful at day trading, you need to  committed to studying and working hard. It is not like gambling and it is not easy. You cannot jump right into it and expect to make lots of money. Successful day traders have skills that are usually only acquired through practice and over time. First, you need the right tools and books so that you can educate yourself. Remember that you are competing with many professional and experienced traders and if you don’t take it seriously, you can wound up losing a lot of money. If you want to learn how to trade stocks, below are the top day trading books that you should have on your bookshelves.

Best Day Trading Books

1. A Beginner’s Guide to Day Trading Online by Toni Turner

This is one of the best day trading books for beginners who are new to day trading. Toni Turner shows us how the market works in a step-by-step matter so that you can day trade in today’s market. She provides us with the latest information on mastering the financial markets, including new trading products such as ETFs (exchange traded funds) and E-minis. She also teaches us decimalization of stock prices and the best entry and exit points to maximize our profits. She covers basic charting patterns that are essential to trading and explains them in simple terms. Day trading requires strict discipline and this is a great book to get started. I would also recommend this book for those who are swing trading as many of the same concepts apply.

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

This is another great day trading book for beginners. Andrew Aziz shows us the day trading process and provides us with real trade examples. The book is a short, easy read, with only 232 pages yet he covers a lot of very useful material. He talks about the importance of risk management, money management and trading psychology. Day trading is definitely not easy and Aziz reinforces that throughout the book. He recommends practice trading in a simulator account first instead of trading with real money. Aziz talks about having discipline and reminds us not to get emotional.  He shows us his day trading strategies and explains step-by-step how to find stocks, how to trade them, and what to look for. He also teaches you how to read stock charts, candlestick patterns, and more.

3. The Simple Strategy – A Powerful Day Trading Strategy For Trading Futures, Stocks, ETFs and Forex by Markus Heitkoetter

This book is an easy read and Heitkoetter gets straight to the point. He shows us his strategy based on 3 popular technical indicators – Bollinger Bands, MACD, and RSI. He provides us with realistic profit expectations and the disadvantages of using the strategy. Although the strategy may not be for everyone, it is worth a try to backtest and see if it works for you. He walks us through the trade setups step by step and provides a lot of stock charts as examples. He also reviews popular technical indicators and how to apply them to different markets.

4. Day Trading Made Easy: A Simple Strategy for Day Trading Stocks by Matthew R. Kratter

This book is also a great day trading book for beginners. It is short and is an easy read. Even if you do not know anything at all about trading stocks, you can start by reading this book to get you up to speed. Kratter discusses how to find the best stocks for day trading, how to short stocks using the Day Sniper strategy, how to set your stop loss and profit target for the day, and more. He explains everything step by step on what to do and how to do it. He even shares his contact information in the book if you want to reach out to him by email and seek help.

5. How To Day Trade Stocks For Profit by Harvey Walsh

This book is easy to understand and is perfect for beginners to day trading. No previous trading experience is needed prior to reading this book. You will learn how to trade with other people’s money and keep profits for yourself, how to make money even when the stock market is down, and entry and exit points for maximum profit. Harvey Walsh also talks about reasons why traders lose money and how you can avoid them. By following his methods, you can learn how to not let fear and emotion affect your trading decisions. He has 14 Golden Rules of trading that will help you become successful in day trading.

6. How to Day Trade: A Detailed Guide to Day Trading Strategies, Risk Management, and Trader Psychology by Ross Cameron

Cameron shows us the trading techniques that he uses himself to profit from the stock market. He explains that even before you start trading, you need to build the foundation for success. He addresses the reason why many of the traders won’t succeed at day trading. He believes that the two most important skills that a day trader can possess are a hunter of volatility and manager of risk. He explains how to find predictable volatility and how to manage your risk so that you only have to be right 50 percent of the time and still make money.

7. Mastering the Trade by John F. Carter

This book covers a lot, including trading psychology and intraday or swing trading techniques and setups. The book begins by talking about trading psychology, such as the types of mistakes we make due to our human behavior. This holds true whether you’re trading stocks or futures. Then, the later chapters cover setups and when to enter and exit a trade. These techniques work great for day trading. It’s helpful to test John Carter’s setups to see if they also work for you.

8. The 1 Hour Trade: Make Money With One Simple Strategy, One Hour Daily by Brian P Anderson

This book teaches you how to realisticially create wealth through trading. It isn’t a get-rick-quick book but instead, you need to focus on one specific strategy until you’ve mastered it. Instead of just reading investment theory, Brian Anderson explains his actual strategy step-by-step and with detail. He will tell you the specific scanning parameters for finding trades, the type of analysis you will need to do to determine whether or not to make the trade, and how to execute the trade and be profitable. You will learn how to scan for stocks in real time and earn intraday gains, how to analyze charts to determine whether a setup is likely to succeed, and how to exit the trade for maximum profit. Following his strategy and maintaining discipline will make you become a better trader.

9. The Truth About Day Trading Stocks: A Cautionary Tale About Hard Challenges and What It Takes To Succeed by Josh DiPietro

Josh DiPietro gives us a honest overview of the reality of trading. He explains why many people who try day trading fail. He offers practical guidance for day trading and provides us with real-life examples. This is an easy read and it is interesting to hear about his own personal experiences, such as the emotional swings that he had when he first began trading. It’s not a “get rich quick” book, but instead gives you realistic expectations of trading.

10. Day Trading: Beginner’s Guide to Make Money with Day Trading by Warren Richmond

If you are just starting out with day trading, this is a great book to read. It explains what day trading is and isn’t and whether it is right for you. There’s a lot of information out there but this book will cover the basics and the essentials of trading you need to know before you begin day trading. The information is easy to understand and he includes valuable tips and strategies. You will learn about making your first day trade, mistakes to avoid, day trading risk management, and useful tools needed to be successful at day trading. This book is well written and I would recommend it to entry level day traders.

Stock Trading for Beginners

The below guide to online stock trading for beginners will walk you through selecting a discount broker, how to research stocks, and introduction to technical analysis. Although there are many people who make money from stocks, there are also a lot of people who lose all their money. It is helpful to do your research before you start trading.

Best Stock Brokers

Choosing a stockbroker is one of the first and most important decisions you’ll make as an investor. Every trader has a different investment style so it is necessary that you do your research to find the best online broker for you. When choosing an online broker, you will need to consider the commission per trade. You will want to find a low commission for the securities that you trade the most. For example, if you mostly trade options, you may want to find a broker with the lowest option fees. If you only trade stocks, you probably want to find a broker with the lowest commission per trade for stocks. Some brokers also charge a fee to buy mutual funds and index funds. Often times, you’ll find that brokers that have the lowest commissions on stocks usually don’t offer any commission-free ETFs, and vice versa. This is why it is important to know which investments you plan on purchasing most to help you determine the most cost-effective broker. There are other account fees to watch out for, including annual fees, inactivity fees, fees for research and advanced trading platform.

Some active traders may want to look for a broker that offers an advanced trading platform, analysis tools, and relevant research and data. There are plenty of online brokers that offer these tools and research for free. Some of the most popular online brokers include Ally, E-Trade, Scottrade, Fidelity, and TD Ameritrade. There is no single best online broker for everyone. What works for one trader may not work for another due to different investment styles.

How to Research Stocks

Once you pick a stock broker, it is time to learn how to research stocks. We recommend these top 10 trading books to get started. There are two main methods that traders use to choose stocks: fundamental analysis and technical analysis. We focus mostly on technical analysis but let’s talk about both methods.

Fundamental Analysis

Traders who use fundamental analysis look at a company’s financial statements, public statements, yearly and quarterly earnings, and news releases in an attempt to measure its intrinsic value. They also study macroeconomic factors such as overall economy and microeconomic factors like company management. Fundamental analysts look at anything that affect’s a security’s value to see if it is undervalued or overvalued. Their goal is to find fundamentally strong or weak companies from key qualitative and quantitative factors and economic indicators. They go long on the strong companies and short the ones that are weak.

Technical Analysis

Traders who use technical analysis look at stock charts and analyze trading activity such as price movements and volume. Unlike a fundamental analysts whose goal is to determine a security’s intrinsic value, a technical analyst believe that past trading activity and chart patterns are better indicators of a security’s future price movement. Technicians believe that the market discounts everything and that all information, whether past or current, is already reflected in the security’s price. Thus, they study stock charts and use technical indicators to find patterns and the best trade entry and exit points.

Technical analysis can be applied to any security, such as stocks, futures and commodities, fixed-income securities, forex, and more. There are different types of stock charts but the most popular ones are bar chart, line chart and candlestick charts. Read more to learn how to read stock charts.

Top Technical Indicators

Technical indicators are used to analyze price movements in an attempt to predict future price movements. They are useful for identify good entry and exit points. There are two main types of indicators: leading indicators and lagging indicators.

Leading indicators precede price movements and are used to predict future price movements. They are most helpful when there are sideways or non-trending trading ranges because they can identify breakouts or breakdowns. A few of the popular leading indicators include the Relative Strength Index and Stochastics Oscillator.

Lagging indicators follow price movements and are more useful during trending periods. They are used to confirm whether a trend is still in place or if it is starting to weaken. Common lagging indicators include MACD, and Bollinger Bands.

Technical indicators are used to form buy and sell signals through crossovers and divergence. Crossovers appear when the indicator passes through an important level or a moving average of the indicator. It signals that the trend might be changing. Divergences appear when the price trend is moving in the opposite direction of the indicator. This signals that the price trend may be weakening as the momentum is changing.

What is Swing Trading?

A lot of traders using technical analysis like to swing trade. Swing trading is a short term method used for trading securities. Unlike day trading where positions typically last only one day, swing trading positions can last from anywhere between two days to three weeks. Swing traders use technical analysis and study chart patterns to make predictions on future price movements. They disregard fundamental analysis and aren’t interested in the intrinsic value of stocks. Instead, they look for stocks with short-term momentum that can allow them to capture gains in just a few days.

Some swing trading strategies include trading along with the trend, trading breakouts, and trading after a price gap. Another strategy that swing traders use is candlestick charts to find patterns. You can read more about swing trading strategies.

Candlestick Trading

Many technical analysts love to use candlesticks as part of their trading strategy. It is helpful to know how to read candlestick charts because they reveal many insights. Candlestick charts show the open, high, low, and close prices. They have contrasting colors, which help traders make fast visual interpretations. Compared to traditional bar charts, candlesticks are visually appealing and reveal emotions surrounding a stock.

There are more than 100 candlesticks and candlestick patterns. Some of the top candlestick patterns include the doji, engulfing patterns, harami, hammer, inverted hammer, shooting star, hanging man, and dark cloud cover.

Tips for Trading Stocks

Below are tips for beginner traders.

Don’t invest money you can’t afford to lose – When you invest in the stock market, remember that there is always a chance that you can lose all of your money. Make sure that the money is truly expendable and not needed to pay for your kid’s college tuition or paying rent. Don’t be too eager to invest all of your money thinking that you will having gains. Instead, invest what you can afford and once you have realized gains from your investments, you can reinvest those gains.

Research – Don’t trade if you don’t plan on doing any research. Stock trading should be treated like a part-time job. Whether your method of trading is based on technical analysis or fundamental analysis, you can start by reading these top trading books. It is also helpful to read the latest news and financial reports of the companies you want to invest in. If you don’t have time to do research, you can consider investing in index funds instead.

Have a strategy – When looking for a stock to invest in, have a set of criteria to comply to and consider its risk and reward. Schedule limit orders so that you do not get emotional. Have a plan and stick with it. Know why you are buying a particular stock, the expected return, and have an exit strategy.

Practice – Test a trading idea or method before using real money. You can paper trade and backtest to historical data. If backtesting shows good results, you can execute the plan in real trading.

Set stop losses – A stop loss is a predetermined exit price. A stop loss limits the trader’s exposure and helps to prevent you from becoming emotional. Exiting all trades with a profit is unrealistic. Using a stop loss ensures that your losses and risk are limited.

Control your emotions – Don’t get emotionally involved with any of your stocks. Short-term movements are often driven by speculations and emotions rather than logic. It is important not to get affected by the market’s emotions. You should have a good reason for buying a stock and establish the point at which you will exit your holdings. Having an exit strategy before you enter the trade helps you execute that strategy unemotionally.