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89 of 93 people found the following review helpful:
5.0 out of 5 stars
Every trader needs to read this book, May 17, 2008
This review is from: Sell and Sell Short (Wiley Trading) (Hardcover)
If you are searching around on Amazon for a book on trading stocks then look no further, this is it. I have been a successful trader for years and read over 85 books on trading, in my opinion this is the best. While as the title suggests it teaches when to sell your stocks for profits, and also does the best job I have seen on explaining short selling and when technical indicators show to short. This book is a complete book for any trader. The main lessons of this book is when to lock in profits and exit a trade using a target, and how to double your potential for profits by not only buying stocks but also selling stocks short and buying them back at a lower price for profit. Professionals sell short because while overall the stock market drifts upward, when a stock falls it falls over twice as fast as it rises. I sell short and it is a powerful tool when used correctly. This book will show you when it is appropriate to short.
Dr. Alexander Elder is the only author I am aware of that integrates trading psychology, money management, and record keeping into one book. These three factors will determine whether you are successful in the market or not, even more than the trading method you choose.
You will learn the three great divides in trading, technical vs. fundamental, trend vs. counter trend, and discretionary vs, systematic. The author follows a discretionary strong technical approach trading counter trend for the most part. However what you learn in this book can be applied to any type of trading. The authors own technical approach uses prices, volume, exponential moving averages (13 day, 26 day), envelopes, MACD, and force index. Limit your tools to no more than five, more is less, any more just causes confusion. The main method you will learn in this book is using the moving averages as a technical base for agreed upon value and buying at the lower edge of the envelope and selling at the high edge of the envelope when you have favorable MACD and force index agreement, or buying at value between the EXP MAs.
If you are going to be a trader you must follow the money management suggestions in this book. NEVER risk more than 2% of your total equity on a trade, and if you lose 6% of your equity in a month you must stop, clear your head and start back next month. If you follow the 2% rule from the book, it will be a major life lesson in your trading and save you a ton of equity draw downs.
Your long term success as a trader is determined by your ability to learn from your mistakes and not repeat them. The best way to do this is to keep detailed records on a spreadsheet and charts of each trade and a diary of why you traded. You must look squarely at each loss and win. If you learn from each bad trade and limit your loss to less than 2%, it can turn into a long term positive.
This review only scratches the surface of this great book. It is packed with very helpful principles, real trades, humour, and is just outstanding. I really grew as a trader from reading and implementing Dr. Elder's best selling classics "Come into my trading room" and "Trading for a living", but in my opinion this one is the best, using exerpts from his past books to build an even more complete picture. If your dream is to trade for a living or just trade succesfully this is the book to buy.
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65 of 70 people found the following review helpful:
3.0 out of 5 stars
Should you buy this book or not?, September 9, 2008
This review is from: Sell and Sell Short (Wiley Trading) (Hardcover)
$53.55 plus shipping. So is this book worth the price? I will hopefully be able to give you an objective answer through this review. I would like to preface this review by saying that I have not read Elder's "Come Into my Trading Room" for a couple years (so my memory might be sketchy). I remember reading it at the time and coming away with a profound respect for Elder and how well he outlined the steps to becoming a professional trader.
This book is a bit of a paradox to me. On one hand, it is a very good representation of what it takes to become a great trader. If you follow the things Elder says, and have the discipline to stick to them, then it is improbable that you will not eventually become a successful trader.
With those things said, I felt that this book was much lighter in some ways then his most famous book. "Trading Room" is a tough act to follow as one reviewer on here said. That book has everything you need, and a lot more in depth knowledge then "Sell and Sell Short" offers. While reading this book, I was constantly a bit disappointed at how much it was angled towards the beginner. That's fine if that is what the book is aimed for, but with this price tag, I felt that it was a bit of a contradiction.
If you are going to price your book at an 80$ tag price, it should have some very in depth, and advanced materials. I know some of the expensive books I have purchased are the kind that you can keep coming back to over and over again to gain new insight into what the author was communicating (Mark Douglas comes to mind, not to mention Elder's previous bestseller). So while I thought this material was all relevant, I felt a bit like I was reading a high priced update to "Trading Room."
To show a bit of what I am talking about, let's take the example of keeping records. Elder goes to great lengths to convince his reader that keeping good records is the most important part of being a good trader. I happen to agree with him, but I was disappointed that he did not elaborate more on WHY it is so good.
I understand that it lets you correct past mistakes, but he did not really go farther then that. Good records are important because it keeps you focused in the NOW. If you take good records, it makes you focus on how you did on each trade. Most people who are new to the markets tend to focus immediately on the P/L of their account; they think its all about making money.
They should be focusing on how well they perform on each trade, the level of emotion they are letting make their decisions for them, how losses feel, etc. If you focus on the money and whether you're winning or not, you are not focused on a long term winning attitude that will make you a professional trader in the long run. A professional knows that any trade is pretty much a toss up; there are too many unknown variables that can take you out of a trade. If you beat yourself up about it, then essentially you are attached to the trade, and will, in the long run, be a loser.
So because he did not explain why it was so essential to keep records, the reader does not know how to replicate that needed element in something that may not be concurrent with what the author advised. For example, before charts were electronic, one could get the exact SAME psychological benefit of focusing on the now moment and improving attitude by taking records of what the market does, and updating charts manually.
Jesse Livermore's 1940 book "How to Trade Stocks" displays this perfectly. Livermore advocated keeping strict records of what the MARKET did, not essentially what his trade did. If Elder showed why a certain aspect of his book was important, he would leave the door open for traders to creatively find other ways to achieve the same effect as taking good records. (I have heard of market makers keeping great records of delta exposure daily that were great for them when they could not keep track of every trade they did.)
I was hoping that Elder would go a bit more in depth into why psychologically, he had his methods, but I have one more complaint. The way he constantly tells the reader how a professional trader compares to an amateur is a bit annoying after awhile. Professionals share one thing in common, and that is a winning attitude, but they DO NOT share methods in common. There are tons of ways to skin a cat, Elder may think that buying options is for amateurs, but he should talk to a lot of hedgies that were long volatility into some of the events that rocketed the markets in the 90s. They were glad they were long options, and they are still around today to tell the tale, unlike LTCM and other firms that thought selling volatility was the only way to go.
My final verdict? I respect Elder immensely for what he has done, and like the fact that he released this book to help people when he easily could have been trading and making more money. But this book's value is really not worth it over "Trading Room." If you then add in all the other great trading books out there, buying books like this for this price really cannot be justified unless you are like me, and just want the experience of Elder's latest. Great book Elder, bad price, hats off and congratulations.
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39 of 43 people found the following review helpful:
5.0 out of 5 stars
Another tour de force !, May 11, 2008
This review is from: Sell and Sell Short (Wiley Trading) (Hardcover)
Why the book's title? - Traders love to buy, but hate to plan when to sell. (Spontaneous selling in the heat of trading does NOT work out well.) Dr. Elder's new book has great ideas and examples of how to set stop-losses, how to define sell-targets, when to "cut-and-run" from a stale trade, and how to sell short. But there's much more to this succinct book.
It's also a complete review of Dr. Elder's trading approach, as it has evolved over his career. More than a "cook-book", it's like being in the kitchen with Dr. Elder and his trader colleagues as they plan, implement and document a series of trades.
His perennial themes are present: hope is not a strategy, so plan your trades; every trader must develop a style that suits his or her own personality; show me a trader who keeps good records, and I'll show you a good trader.
These themes come alive in this new book, perhaps because they are spelled out so clearly and succinctly. They feel achievable.
Of course, getting there is a process. I've studied Dr. Elder's books for 5 years, participated in his "webinars" and a week-long "traders camp". I'm here to say he's not peddling dreams (like so many trading "gurus") but offering up the tools he developed over 20+ years of becoming a top trader.
Dr. Elder's new book has given me renewed energy to make changes and take my trading to the next level.
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