Trading For A Living: Psychology, Trading Tactics, Money Management

Submitted by Share Trading on 31 May, 2008 - 23:39

"Trading for a Living: Psychology, Trading Tactics, Money Management" by Dr Alexander Elder is a great book to introduce a novice into the world of trading. This book has become a core part of my trading library as well as my trading mindset. Dr Elder has given me and many traders a perfect world view of a highly trained, highly successful trader: the ideas and concepts introduced are well thought out and organised. At times the book may be out of date, but most of the principles still hold. Trading for a Living is a quite comprehensive book, starting out with psychological aspects of trading and continuing to slightly more abstract ideas of technical trading and reading charts as well as detailing a few simple trading systems. All in all this book has taught me priceless concepts that have saved my capital and is well worth the cover price.

Important Concepts from Trading For a Living

Dr. Elder's emphasis is on trading safely and introduces concepts which help in reducing risk. He focuses heavily on the psychology of trading early on the book and presses into the reader that money should not be the primary goal of trading: the ultimate goal should be trading well. The money will follow when you perfect your trading discipline and technique.

Psychologically speaking, 'Trading for a Living' talks about how your psychological mindset impacts your bottom line (i.e. your trading capital and profits). You must be mindful if you become arrogant, angry or fearful and also be aware of "gambler's high". In Dr Alexander Elder's view, the best traders are simply like robots, systematically executing their trading systems with no emotion. Here are other ideas which I still recall from my last reading of this book:

  • The opening prices on the stockmarket is primarily determined by the amateur traders and the prices closer to the closing time of the markets are determined by professional traders.
  • The concept of a price chart pattern being a representation of mass psychology and a price itself an instantaneous balance between the push-pull effect between the bulls and bears.
  • The home trader - the trader who trades their own money fights a losing battle against institutional traders (who have limitless resources of research and also have a lower psychological burden as they are trading other people's money) - that is unless they have patience and discipline while trading the stockmarkets.

Trading For a Living - Table of Contents

Trading - The Last Frontier.
The Odds Against You.
INDIVIDUAL PSYCHOLOGY.
Fantasy Versus Reality.
Self-Destructiveness.
Trading Lessons from AA.
Winners and Losers.
MASS PSYCHOLOGY.
What Is the Market?.
The Market Crowd and You.
Managing Versus Forecasting.
CLASSICAL CHART ANALYSIS.
Support and Resistance.
Trendlines.
Chart Patterns.
COMPUTERIZED TECHNICAL ANALYSIS.
Moving Averages.
The Directional System.
Williams %R.
Relative Strength Index.
THE NEGLECTED ESSENTIALS.
Volume-Based Indicators.
Herrick Payoff Index.
STOCK MARKET INDICATORS.
New High-New Low Index.
PSYCHOLOGICAL INDICATORS.
Consensus Indicators.
NEW INDICATORS.
Elder-Ray.
TRADING SYSTEMS.
Triple Screen Trading System.
Channel Trading Systems.
RISK MANAGEMENT.
Money Management.
Afterword.
Sources.
Index.

Book Cover Blurb
You have just taken a big step away from the crowd of amateurs. By opening Trading for a Living, you've resolved to become a successful trader. Dr. Alexander Elder is a professional trader, a world-class expert in technical analysis, and a practicing psychiatrist. He believes that successful trading is based on three M's: Mind, Method, and Money. First, you will see that the key to winning is inside your Mind. You will find out how to develop discipline and how to avoid the traps of emotional trading. Second, you will learn how to find good trades by using charts, computerized indicators, and other tools. You will discover how to combine several analytic Methods into a powerful trading system. Finally, you will learn how to manage Money in your trading account. The rules for limiting risks are as vital to a trader as a safety net is to a high-wire walker. With this book, you are on your way to mastering a new way of trading stocks, futures, currencies, and options. Dr. Alexander Elder helps you embark on an intense pursuit-trading for a living.

Book Key Phrases
Here are some key phrases contained within Trading For a Living by Dr Alexander Elder: bearish, channel line, best trading signals, weekly trend, bullish divergence, shorting signals, strong buy signal, strong sell signal, best trading opportunities, stochastic, risk management, Elliott Wave.

Book Details
Hardcover: 289 pages
Publisher: Wiley; 1 edition (March 8, 1993)
Language: English
ISBN-10: 0471592242
ISBN-13: 978-0471592242
Product Dimensions: 9.1 x 6.3 x 1 inches

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