82 of 87 people found the following review helpful
I am glad that Dr. Elder took the time to update and publish this book in a new edition. He saw the warning signs of the 2007 bull market coming to an end and had the foresight to write a book about the importance of timing exits and the value of shorting stocks when the time was right. It appears that the author is also as good with his entries and exits in publishing as he is in trading. He could not have given the trading community a better book at a better time when it was first published in May 2008.
If you are searching around on Amazon for a book on trading stocks then look no further, you have found one of the best ones on the market. I have actively traded successfully for over 12 years and read over 160 trading books, this stands out as one of the best. The book is a complete book on trading, it does not skip over any of the most important areas a trader will need for long time success in the markets.
1. The trader must have a trading plan, even discretionary traders.
2. The trader must keep good records to understand his mistakes and successes.
3. A trader should not trade so big that it causes excessive stress and bad judgment.
4. A good rule is to cut every loss to a maximum of 2% or less to limit the risk of ruin.
5. Trading with discipline will put you ahead of the majority of traders.
6. Your trading must fit your own personality and risk tolerance.
7. If you use fundamental ideas for a trade cross check it with the technicals of the chart.
8. Stock option buyers are net losers in the market.
9. Traders can not give up on a stock because they are stopped out, successful traders keep trading the stock until they catch the winning trades.
10. False breakouts and rallies off support are two of the best trading opportunities.
The trading style of the book's author is to trade with a fast and slow exponential moving averages (13,26), along with envelopes. He explains how to use short term swing trades using the MACD and force index to trade when a stock is technically above or below its value zone. The style is not to catch huge trends, it is just to have winning high probability trades by catching half or more of the stocks average range. This is the way professionals trade in a normal market environment. Risk management using stops will protect you from any trend that does take off and falls outside the normal range.
While as the title suggests it teaches when to sell your stocks for profits, and also does the best job I have seen of 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,technical analysis, and record keeping into one book. These four factors will determine whether you are successful in the market or not, even more than the trading method you choose.
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, If you follow the 2% rule from the book, it will save you from learning this major life lesson the hard way and save you from huge 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, humor, and is just outstanding. I really grew as a trader years ago from reading and implementing Dr. Elder's best selling classics "Come into my Trading Room" and "Trading for a Living". If your dream is to trade for a living some day or just trade successfully this is the book to buy.
I was also very glad that Dr. Elder added in trades from the bear market of 2008-2009. I found his explanation of his trades very interesting and informative. There were reviews of some charts from that time period that showed signals of the bottom and when it was time to quit selling and selling short and start buying again.
47 of 54 people found the following review helpful
I have read Dr.Alexander Elder's every single trading book, few of them Re-read again and again.And trust me, this book is one of such rare breed of books. With his previous books, the message was so influential, that I joined "Spike Trade" for few months. You might have guessed, Yes, I am little biased,but this review is purely based on the quality of the book.
MIND IS NEVER COLOR BLIND:
Before I get into the content of the book, I wish every author who writes a book on stock market (with Charts) should realize color helps understand the message the author wants to convey. Tons of charts in the book alone are worth more than the price of the book. I have read several books on stock markets,but they all miss the visual appeal of descriptive charts. They have some black and white charts with few lines and no descriptions on the charts itself.
NEWBIES - AMATEURS - SEMIPROFESSIONALS:
First of all , this book should not be your starting point for Alexander Elder's books. For Newbies the suggested order...
1. Trading for a Living: Psychology, Trading Tactics, Money Management ( You will need to read it twice)
2. Start making journals and learn from your trading experiences
3. Come Into My Trading Room: A Complete Guide to Trading (Masterpiece...Read 4 or 5 times to absorb the spirit and content of the book.)
4. Entries & Exits: Visits to 16 Trading Rooms (Wiley Trading) (Read once)
5. The New Sell and Sell Short (Wiley Trading) (Read couple of times)
7. Understand Metastock, Tradestation, esignal type tools.
8. Attend his seminar if you can afford.
LATE STAGE AMATEURS - EARLY STAGE SEMI PROFESSIONALS :
If you have read the above books and show fairly consistent equity curve , how will this book help? . It is a great refresher.
> How Confident are you identifying bullish or bearish Divergence?
> How often have they turned out to be correct?
> Do you still have spreadsheet and mental notes separately?
> Do you review them?
> What have you done to become a better trader?
> How many times have your stops been hit? Why?
> How many times did you get out late / Early .. Why?
> Do you compress the entire life of the charts to see how the stock is doing compared to it's historic averages?
Elder's books were the single largest reason for me not getting wiped out in the stock market. But this book brought me back to the reality that getting past amateur to semi professional is not an easy breeze.I have to be more honest with myself in making the notes, reading it and so on.
The exercises are boring; but so is serious trading . Please take time to do the exercises sincerely. Assuming you read the book and took the tests sincerely, you can skip the tests when you read it second or third time ( highly recommended)
The next few lines of this review , if you read and follow will have far more impact on your trading career than any individual book. For beginners/Semi Professionals/part time traders . Similar to "Driver License" being mandatory to Drive, I wish the following books below are mandatory requirements before anyone opens an online account. The books listed below are "gems" if you are not a "buy and hold" investor.
1. Trading for a Living: Psychology, Trading Tactics, Money Management
2. Come Into My Trading Room: A Complete Guide to Trading
3. How I Made $2,000,000 in the Stock Market
4. How to Make Money in Stocks: A Winning System in Good Times and Bad, Fourth Edition
5. Reminiscences of a Stock Operator (Wiley Investment Classics)
6. Trade Like an O'Neil Disciple: How We Made 18,000% in the Stock Market (Wiley Trading)
6 of 7 people found the following review helpful
on October 16, 2012
A flight instructor would be justified in sensing something was seriously amiss in students blissfully unconcerned about the details of all the going down and at some point landing bits. Yet a great deal of the trading literature is just like that. Often you find only vague platitudes on this entire side of the venture. Is it any wonder a majority crash and burn?
While the new edition can stand on its own as an overview of his trading advice, it's brave FOCUS on when to sell and advocacy to short "when you hear that bell" makes it stand out. Often an author will blow off spending much time of playing the downdrafts of markets, assuring you the pattern and strategy under discussion will "work just the same" going the other way. Just flip it around for a "mirror image". This might work in zero-gravity. For share prices, suspended between sky and a hole in the ground by the good ol' laws of physics and human nature, nothing could be further from the truth. Elder points out the resulting asymmetry. Precious knowledge around many tops or bottoms. For those that employ Inverse ETFs, where up IS down, it would be dangerous to forget which direction depends on hope's flapping wings and which the pull of earth.
One of things I also appreciate about Elder is his hands on emphasis. The text in this book is short on debating market theory and long on assessing basic context and price action. His use of indicators is lean and mean. In the New Sell, Elder sticks to a few Moving Averages plus the MACD and (his own volume+ based) Force Index. He correlates them to price action for confirmations of direction, a sense of momentum and possible alerts in divergences. There are other tools one could use for a similiar effect. But his discussions and detailed examples using the latter two are very interesting.
At a time when there is easy money to made churning out titles for the forex frenzy, Elder deserves credit for NOT jumping on the bandwagon. This book's scathing coverage of that playing field is a treat.
Not to be a party pooper, each chapter of the new edition does come with homework. Oh mannnn! But it's all good. For one thing it forces the reader to pass judgment at that hard right edge of the chart. Gone is the omnipotent vantage point of most chart reprints. Furthermore the answer sections contain more nuggets and value added discussion.
With no disrespect, there are other authors that cut through the noise and grab ME more than Elder has so far. Yet in a genre crowded with calls to "Come Into MY Trading" web, Elder deserves his status as one of the more respected statesmen. This book is a good example of why. It is a well written, attractively presented, honest, roll-up-the-sleeves contribution. It's many points help us do our own homework with better glasses and sharper senses. What else can one ask for? Happy landings!
15 of 20 people found the following review helpful
on April 18, 2011
Alexander Elder focuses most of his attention on selling and shorting equity instruments, not on buying them. The author does not provide an in-depth examination of trading in futures, options, and forex. Elder explains to his audience mostly the ins and outs of short-term trade. However, readers do not have to be short-term traders to benefit from the book under review.
Elder firmly believes that successful trading results from the combination of what he calls the 3 Ms: Mind (i.e., trading psychology), Methods (i.e., indicators and tools), and Money (i.e., risk control). Elder emphasizes repeatedly the importance of keeping good records for each trade to become a successful trader. Clarity and discipline are the pillars on which successful trading rests. The author provides a template to be used for documentation purposes.
In his trading examples, Elder helps his audience interpret charts and leverage mostly his favorite indicators: moving averages, envelopes, also called channels, MACD, and the Force Index. Readers who have no prior familiarity with these indicators are advised to gather first information on this subject before going through Elder's guide to trading.
Elder gives his audience the opportunity to put theory into practice through a 100+ questions about 1) psychology, risk management, and record-keeping, 2) how to sell, and 3) how to sell short. Answering first the questions before turning to the answers section is key to testing one's knowledge about these topics.
Finally, Elders completes his examination of the new sell and sell short by reviewing the lessons to be drawn from the current bear market rally.
In summary, Elder gives his audience a great opportunity about how to learn to combine the 3 Ms mentioned above with success. The author reminds his audience repeatedly that only a minority of traders systematically make money in financial markets over time.
10 of 13 people found the following review helpful
on May 20, 2013
I was looking forward to learning more about selling and particularly selling short. While I am a relatively new investor, I have taken much time to be educated on investing. I had read many reviews on Elder's books and thought this would be helpful. It was not!
First, Elder referenced a number of investing techniques and market indicators as if the reader should already know what they were and how he used them. He talked about value and how he uses moving averages, but spent little time explaining the concept. He even said that he had received complaints from readers about repeating things, but unless I read every book in order, I have no idea what he is referring to.
References to the Force Index and Envelope had no explanation. I went to the index to try to find a definition and guess what....NO INDEX!! I wish I would have know just that before buying. Any text like book that does not have an index is suspect in my eyes.
Unfortunately I wrote in the book early on while taking one of the quizzes, otherwise I would have returned the book immediately. I will now look for the right book on selling and shorting.
7 of 9 people found the following review helpful
on September 5, 2011
I started swing trading about four years ago and Dr. Elder's "Come into my Trading Room" was one of the first books I read. Since then, I developed my trading style and have been constantly profitable as can be seen by the performance of my public Covestor Model Portfolio. The reason why I'm saying this is not in order to run victory labs here. Instead, I think it shows that Elder's concept is valid. Maybe 80% of my trading is based on his ideas, so the approach has been working for me.
Even though I read other Elder books before, "The New Sell and Sell Short" (TNSaSS) was a great refresher and expanded on the concepts of the earlier books. I therefore would recommend to either start with "Come into my Trading Room" or "Trading for a Living". As a trader, you constantly have to work on your game and over time, you are modifying your initial strategy. So reading TNSaSS sort of puts your strategy to a sanity check and re-think your latest approach.
The book is very well written and not just an update of older readings. Color charts make a big difference and the integrated exercises really help to reflect on what you have just read.
Other reasons why I like the book:
- Buying is covered only in a very brief chapter, so I'm not getting bored with stuff that was written in earlier books.
- A lot of practical examples with charts
- The chapter "lessons of the bear market" walks you through the 2008/09 bear market. Very helpful.
Overall, I can only recommend the book.
Note that I recently posted more comments on Elder's style and how it influenced my trading on my blog: [...]
2 of 2 people found the following review helpful
on September 14, 2012
I have two other books written by the Author: "Trading for a Living" and "Come into my Trading Room" and have noticed, as some other reviewers did, his tendency to repeat material between books especially the sections relating to psychology, record keeping and money management. Although I felt this book was unique in that it related more to when to sell and capitalize on market drops by shorting, I hesitated in buying it due to the reason above so I borrowed it from the library.
I found that this book also repeats sections on money management from other books by the author with slight variations. I am sure the author must have a reason for this, possibly wanting each book to be complete on its own.
Almost thirty percent of the book is dedicated to Questions and Answer sections which are quite basic with clear answers in my opinion. As an experienced trader I felt that they did not contribute much to my trading knowledge; however, I believe they may be very useful to a beginner.
After dedicating the first part to record keeping, psychology and money management, the rest of the book discusses different ways to sell such as: at a target using channels, at a stop, when bearish divergences occur among a few others. While interesting, many of these techniques are basic and are more suitable for less experienced traders.
I gave the book 5 stars mainly because it addressed the often ignored area of selling, which many beginning traders fail to master.
4 of 5 people found the following review helpful
It's rare when it seems as if the author knew me in real life. Lots of books appeal to me although not in the sense that Elder does here. His writing often anticipated exactly my thoughts. How did Dr. Elder do that? His bio shows that he worked with traders using a variety of venues and contexts over many years. He understands what traders of all types go through. Reportedly, he can tell what stage of development a trader is in by listening.
Before getting into content, I'd like to point out the physical value and organization of this book. The paper stock is much higher quality than other books and nothing like a typical paperback book. The graphs are in color as are text boxes, and each page has the identical quality stock. Font size is perfect, something I care more about when I want to keep a book for life and intend to read it many times. Layout and organization is outstanding. There are 4 Parts. The first three conclude with Q&A. I looked at the questions and pondered them before reading the first three parts to prepare myself. The questions and answers are intended not just to inform but to gauge the reader's growth as a trader.
Selling is difficult and definitely more emotional than buying, for most of us. This book outlines psychological signals, indicators and lessons for selling and selling short. Elder helps the reader find a method to fit the personality. It's important to stick with the time horizon that works. Finally, disciplined money management is cultivated as a result of learning how to sell. This book has lessons for life, doing what is difficult at the appropriate time and being honest with oneself.
10 of 14 people found the following review helpful
on April 29, 2011
2008 marked the publication of Dr Alexander Elder's book Sell & Sell Short. Dr Elder has now revised the earlier book. It is now called The New Sell & Sell Short. However, he has now emphasised what it is about. The words in red at the start of this review are now more prominent on the cover of the book: How to take profits, cut losses, and benefit from price declines.
This clearly positions the new edition. It is not only about short selling. The focus of the new edition is first and foremost on two very important things that a trader must master to be successful, even if they have never shorted a stock in their lives and never intend to:
As every trader soon discovers, there are two important aspects to trading. One is to buy at the right time and at the right price. The other is to sell at the right time in order to harvest as much as possible of the increase in price that has occurred. No long trade (buy low and sell higher) is ever completed until the sale of the position has been effected.
However, as ever trader soon discovers, there is a dark side to trading. Every trade does not work out as planned or hoped. Any long trade could go wrong. One secret to trading is not to just know how to take profits, which might be called the easy part (though it isn't), it is learning the art of cutting losses quickly in order to protect the lifeblood of the trader: his or her capital.
But wait - there is more to this book than these two parts.
The first part of the original book dealt with buying. This has been largely dropped to one short chapter. This is a welcome decision. Buying is already well covered in Dr Elder's other books such as Come into my Trading Room and Entries & Exits. However, retained from the original version of the book are invaluable chapters on psychology/risk management and record keeping. Now, many readers might think that record keeping is not important, but they are absolutely wrong. The importance of record keeping, and how it is essential in improving trading or investing skills, is one of the more important things that I have learned from Dr Elder over the years. This chapter, on its own, contains the ingredients to move our trading and investing skills to a higher plane.
The two chapters on selling short are retained in the new edition. Now, I am an investor, rather than a trader. It is well-known to my readers that I do not short the market or individual stocks as part of my investment plan. One reason for that is the difficulty of shorting in Australia unless I use derivatives, which might cause me to be taxed as a trader, or worse, my self-managed super fund might be deemed non-compliant, because I was using it to conduct a trading business. Nevertheless, a trader cannot just sit on the sidelines as can an investor. Traders need to keep the transaction stream ticking over and failing to take advantage of downward trends is like being sent to the sin bin for half the game. Big traders can use short selling in Australia (naked short selling is out legally, but covered shorts are very legal and very possible). Smaller traders may short use derivatives, including contracts for difference, which are not allowed in the US markets. Derivatives pose higher risks than covered shorts, but may be handled if good risk management and discipline have been learned.
There is also a completely new part to the revised book. This deals with the lessons that Dr Elder has drawn from the 2007-2009 bear market. In addition he has a new chapter headed Groping for the Bottom, which will be of great benefit to investors as well as traders who have not yet learned shorting and want first to learn the long side of trading.
The other aspect to the new edition is that the first three parts of the book finish with a series of questions and answers. There is no separate Study Guide with the new edition. Instead, there are 100 questions and answers in the book itself. Some readers will be tempted to just read the answers, which will be valuable, but I think it will be a mistake. The intention behind these questions is to prompt the reader to move out of reading mode into understanding mode. This requires that we stop and ponder the questions. Ideally we will write down our answers before turning to Dr Elder's answers. His answers do not just say what the right answer was - nothing is really learned by that - but explain the reasoning behind the answers. These answers are a new gold mine for traders.
The new edition is beautifully produced on glossy paper with the charts in colour. It is now a paperback.
2 of 2 people found the following review helpful
on December 27, 2011
I truly enjoy reading any of Alexander Elder's books. He has a excellent grasp of the trader's psychology and captures the essence of trading. I can read his books over and over and continue to refine my skills. From beginner to advanced and beyond the best advice for traders everywhere.