There is a wide range of books on loads of strategies, indicators, etc. but price action books are quite hard to find.
As a price action trader, you should not just sit around your laptop’s screen paranoid over an already executed trade.
Instead, channel your free time to backtesting strategies and studying price action secrets.
This is a carefully curated list of some of the best price action books out there.
Each book on this list will improve your price action skills and decision-making on the charts.
PRICE ACTION BOOK #1; Japanese Candlestick Charting Techniques – By Steve Nison
Steve Nison introduced Japanese candlesticks to western traders.
It is now used by almost every trader worldwide on every trading platform.
In this book, he discussed candlestick patterns that indicate indecisions, continuations, and reversals.
The Japanese candlesticks are very important to price action traders.
They provide so much information so it is important to fully understand them.
This price action book will broaden your knowledge of candlesticks.
With the candlesticks, the strength of bears and bulls can be measured by the volume of the candlesticks.
Also, the highest and lowest price during the period is represented by wicks.
#2: Elliott Wave Principle; Key to Stock Market Profits – By John Frost and Robert Prechter
The Elliot wave theory is named after Ralph Nelson Elliott. The wave theory looks similar to the Dow Theory.
The Dow theory states that the market is in an upward trend if one of its averages advances above a previous important high and is accompanied or followed by a similar advance in the other average.
Ralph Nelson Elliott was inspired by the Dow Theory and his observations of the stock market.
With these observations, he discovered that the ever-changing prices of stocks reveal a structural design.
This idealogy was in opposition to the general notion that market movements were random.
He isolated thirteen movements that reoccur in the market price data independent of time and amplitude.
These “wave-like” structures link together to form larger versions of themselves which we still notice in today’s markets.
The Elliott wave provides the overall context of the current market position.
Also, he explained how when a wave does not get completed it might indicate a shift in trend.
For instance, in a downtrend, if the price fails to make a new lower low this might mean that the bearish trend is coming to an end.
PRICE ACTION BOOK #3: The Wyckoff Methodology in Depth – By Ruben Villahermosa
Richard Wyckoff started to work at Wall Street at the age of 15. At 25 years of age, he owned his brokerage firm.
He noticed that the big operators created speculation and manipulated the market to make high profits.
Through observations, Wyckoff found a way to read through the intentions of those who controlled the market using price action.
Then, he informed retail traders about the “real rules of the market”.
The author of this price action trading book explained trend analysis in detail, how intra-day trend works in conjunction with short-term/long-term trends, and price cycles before deciphering the three Wyckoff laws.
All the types of trading ranges (Wyckoff schematics) and the nature of each event in a trading range were discussed in detail.
To my surprise, the re-distribution schematic, which is barely known to many was fully analyzed as well.
PRICE ACTION BOOK #4; Trading Price Action Series – By Al Brooks
These books always feature on every price action book list and rightly so.
Trading Price Action Trends is the first book in the series written by Al Brooks.
This book helps price action traders who struggle to find a trading system.
Furthermore, it eases the identification of trends and explains the uniqueness of each type of trend.
The second book in the price action trading book series; Trading Price Action Trading Ranges provides awareness on the best entry and exit decisions and order management.
Trading Price Action Reversals is the third price action book in this series.
The book sheds light on the types of reversal and their distinct characteristics.
It also touches on the psychological aspect of trading (keeping your emotions in check while trading).
Summary- best Books on Price Action Trading
Price action books are so exciting to read. Most of the price action techniques relevant today are as a result of refinements of these old methodologies.
On some occasions, these methodologies have been “overly diluted” and a lot of key things have been left out.
Meanwhile, a lot of these books are quite bulky and this can be quite overwhelming.
Truth be told, only a couple of pieces of information in a 200 paged book will be useful to your trading style.
So, it is important to filter out content that matches your ideology.