Trading for a Living: Psychology, Trading Tactics, Money Management [Hardcover]

Alexander Elder (Author)

Book Description

Publication Date: March 8, 1993 | ISBN-10: 0471592242 | ISBN-13: 978-0471592242 | Edition: 1

Trading for a Living Successful trading is based on three M's: Mind, Method, and Money. Trading for a Living helps you master all of those three areas:
* How to become a cool, calm, and collected trader
* How to profit from reading the behavior of the market crowd
* How to use a computer to find good trades
* How to develop a powerful trading system
* How to find the trades with the best odds of success
* How to find entry and exit points, set stops, and take profits
Trading for a Living helps you discipline your Mind, shows you the Methods for trading the markets, and shows you how to manage Money in your trading accounts so that no string of losses can kick you out of the game. To help you profit even more from the ideas in Trading for a Living, look for the companion volume--Study Guide for Trading for a Living. It asks over 200 multiple-choice questions, with answers and 11 rating scales for sharpening your trading skills. For example: Question Markets rise when
* there are more buyers than sellers
* buyers are more aggressive than sellers
* sellers are afraid and demand a premium
* more shares or contracts are bought than sold

* I and II
* II and III
* II and IV
* III and IV
Answer B. II and III. Every change in price reflects what happens in the battle between bulls and bears. Markets rise when bulls feel more strongly than bears. They rally when buyers are confident and sellers demand a premium for participating in the game that is going against them. There is a buyer and a seller behind every transaction. The number of stocks or futures bought and sold is equal by definition.

Editorial Reviews

From Library Journal

Soviet-born author and practicing psychiatrist Elder (director, Financial Trading Seminars, Inc.) shares his learning over the years as a professional trader and expert in technical analysis and his principle of understanding the three Ms (Mind, Method, Money), which will strengthen the discipline required to be successful in trading. He explores crucial factors in the markets that most experts overlook, including time, volume, and open interest, and describes little-known indicators to track them profitably. In addition, he covers many of the more technical approaches to investing in futures, such as factoring in the meaning from the Elliott Wave, oscillators, moving averages, Market Logic, and point-and-figure charting. His unique viewpoints in this overly saturated genre explain his particular view that most traders sabotage themselves, while offering tips for others to avoid doing the same. The narration by Richard Davidson soundly guides the listener through this highly specialized work that, although first published seven years ago, remains recommended for university libraries supporting a finance and business curriculum.DDale Farris, Groves, TX
Copyright 2001 Reed Business Information, Inc. --This text refers to the Audio CD edition.

From the Publisher

An eminent futures trader explores crucial factors in the markets that most experts overlook--time, volume and open interest--and describes little-known indicators to profitably track them. Covers all the popular technical approaches to futures, options and stock markets including Elliott Wave, oscillators, moving averages, Market Logic, point-and-figure charting. Explains why most traders sabotage themselves and how to avoid doing the same.

See all Editorial Reviews

Product Details

• Hardcover: 289 pages
• Publisher: Wiley; 1 edition (March 8, 1993)
• Language: English
• ISBN-10: 0471592242
• ISBN-13: 978-0471592242
• Product Dimensions: 6.3 x 1 x 9.2 inches
• Shipping Weight: 1.1 pounds (View shipping rates and policies)
• Average Customer Review: 4.3 out of 5 stars  See all reviews (240 customer reviews)
• Amazon Best Sellers Rank: #15,546 in Books (See Top 100 in Books)

More About the Author

Alexander Elder, MD, is a professional trader and a teacher of traders, based in New York. He is the author of several best-sellers, considered modern classics among traders. He also wrote books about Russia and New Zealand.

Dr. Elder was born in Leningrad and grew up in Estonia, where he entered medical school at the age of 16. At 23, while working as a ship's doctor, he jumped a Soviet ship in Africa and received political asylum in the United States. He worked as a psychiatrist in New York City and taught at Columbia University. His experience as a psychiatrist provided him with unique insight into the psychology of trading. Dr. Elder's books, articles, and software reviews have established him as one of today's leading experts on trading

Dr. Elder is the originator of Traders' Camps--week-long classes for traders. He is the founder of the Spike group whose members share their best stock picks each week in competition for prizes. He continues to trade and is a sought-after speaker at conferences in the US and abroad.

Most Helpful Customer Reviews

150 of 160 people found the following review helpful

2.0 out of 5 stars For Beginners Only January 13, 2003

By A Customer

Format:Hardcover

Elder begins with a chapter on psychology. Mind as he refers to it. In my experience, success in trading has less to do with understanding "the madness of crowds" and more to do with developing discipline. Read Mark Douglas instead.

Next, Elder spends a lot of pages giving the reader a rundown of the most common price patterns and technical indicators. Which is fine if you don't know them, but has all but the most neophyte readers skipping over great gobs of the book.

Next, Elder trots out his two pet indicators and tells you about them. I have used them and they're about as good as any others that you probably already know about and have already used. In other words, I wouldn't buy the book just to get a peek at them.

Lastly, he goes into money management. Elder has said himself that he wishes he had devoted more time to this section. Once again, unless you are a complete beginner, you won't find much meat here either.

Elder likes trading off moving averages and looking for divergences in certain indicators. Well, I have been trading a fair number of years and am here to tell you, you can do better than that. Much better.

If you're a beginner, try reading Nison and DiNapoli/Boroden. Their material is far more effective and will have a much greater impact on your bottom line.

245 of 265 people found the following review helpful

5.0 out of 5 stars If you are halfway from an amateur to a pro, it's for you April 6, 2003

By ServantofGod

Format:Hardcover

If somebody bought, read and judged the book by whether it could really help him or her to go "trading for a living", that somebody would definitely be disappointed. Even the author himself pointed out that the success rate for the conversion of ex institutional traders to independent traders was very low owing to the much higher psychological load of trading one's own money than that of trading OPM.

Despite the over-promise of the book title and the second half of it discussing mostly technical tools, the book is quite well written. There are plenty of bright ideas, some with originality that can be attributed to the author's M.D. and psychiatrist background. In particular I like the following points much:-

- That trading is a minus sum game (considering commission and slippage) and the mass media or gurus or prevalent market view are almost always wrong.

- The analogy of the market as an ocean and a huge crowd of people, in either case an individual can have no control of but have to follow (or leave) emotionlessly for long term profit.

- The analogy of Alcoholic Anonymous with Loser Anonymous that requires the same treatment for true recovery, whereas accepting oneself as an alcoholic or a loser is the very first step of healing.

- The need for discipline and patience as individual traders' only weapon to against institutional traders advantages in faster information, better research reports, lower psychological burden for trading OPM, etc

- Price is a psychological event, a momentary balance of opinion between bulls and bears, its pattern reflects the mass psychology of the market.

- Last but not least, the opening prices are determined primarily by amateurs whilst the closing prices are determined by professionals.

In short, the book is well worth the price and I do recommend it to those who study continuously for self improvement in their trading. Remarks:- The author claimed that he personally did so, too.

207 of 227 people found the following review helpful

5.0 out of 5 stars 2ND READING REVIEW * * * * * January 25, 2000

By Chuck Kelly

Format:Hardcover

I have to say after reading Dr. Elders book for the second time, I am even more impressed with the wealth of knowledge and understanding of what makes the markets move. I prefer the triple screen method that is presented. This book covers all of the basic knowledge for the beginner as well as the experienced trader. If you are new to trading you will find this an excellent source to build your dreams on. I believe study is the key to sucess in any endeavor. This book is easy to read and you will be amazed at the insight you will gain as to the day to day operation of the markets. I think it is important to decide on what method makes the most sense to your trading style and then learn all you can about it. The more knowledge you have the better decisions you make. I find the hardest part being money management. I have to control my urge to follow my gambling impulse to bet the farm on what looks good in the charts. Even though I know it is a sure way to loose in the market. This is a game of the most interesting kind that changes on a moment by moment basis. What a great way to make money. My word of advice on any trade where you have the slightest doubt of why you are in it is to GET OUT IMEDIATLEY ! . If you do not know why you are in a trade and what you expect to happen and why, then you are guessing. If guessing is what you like to do go to Las Vegas and have a great time. Best to you all in trading. If anyone has a real-time quote service they are proud to have please let me know who they are. Thanks