The New Trading for a Living: Psychology, Discipline, Trading Tools and Systems, Risk Control, Trade Management (2nd Edition)

The New Trading for a Living: Psychology, Discipline, Trading Tools and Systems, Risk Control, Trade Management (2nd Edition)

Alexander Elder

Language: English

Pages: 303

ISBN: 1118443926

Format: PDF / Kindle (mobi) / ePub


The best-selling trading book of all timeupdated for the new era
The New Trading for a Living updates a modern classic, popular worldwide among both private and institutional traders. This revised and expanded edition brings time-tested concepts in gear with today's fast-moving markets, adding new studies and techniques for the modern trader.

This classic guide teaches a calm and disciplined approach to the markets. It emphasizes risk management along with self-management and provides clear rules for both. The New Trading for a Living incudes templates for rating stock picks, creating trade plans, and rating your own readiness to trade. It provides the knowledge, perspective, and tools for developing your own effective trading system.

All charts in this book have been updated and are in full color, with clear comments on rules and techniques. The clarity of this book's language, its practical illustrations and generous sharing of the essential skills have made it a model for the industry—often imitated but never duplicated. Both new and experienced traders will appreciate its insights and the calm, systematic approach to modern markets.

The New Trading for a Living expands upon the original to become an even more valuable resource

  • Overcome barriers to success and develop stronger discipline
  • Identify asymmetrical market zones, where rewards are higher and risks lower
  • Master money management as you set entries, targets and stops
  • Use a record-keeping system that will make you into your own teacher
  • Successful trading is based on knowledge, focus, and discipline. The New Trading for a Living will lift your trading to a higher level by sharing classic wisdom along with modern market tools.

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    because they wanted his orders. “When you trade from your house, you are never the first to hear the news,” he says. The firms that deal in both futures and cash markets have two advantages. They have true inside information, and they are exempt from speculative position limits that exist in many futures markets. I went to visit an acquaintance at a multinational oil company; after passing through security barriers tighter than at an airport, I walked down a glass corridor that overlooked rooms

    extra layer of smoothing. The %D of Fast Stochastic becomes the %K of Slow Stochastic and is smoothed by repeating step 2 to obtain %D of Slow Stochastic. Slow Stochastic does a better job of filtering out market noise and leads to fewer whipsaws (Figure 26.1). Stochastic is designed to fluctuate between 0 and 100. Reference lines are usually drawn at 20 percent and 80 percent levels to mark overbought and oversold areas. Crowd Psychology Each price is the consensus of value of all market

    you can add to shorts in downtrends whenever Force Index turns positive. Force Index even provides a glimpse into the future. When a 2-day EMA of Force Index falls to its lowest low in a month, it shows that bears are strong and prices are likely to fall even lower. When a 2-day EMA of Force Index rallies to its highest level in a month, it shows that bulls are strong and prices are likely to rise even higher. A 2-day EMA of Force Index helps decide when to close out a position. It does it by

    historical data, usually several years’ worth. The other is forward-testing: trade small positions with real money. Serious traders begin with backtesting, and if its results look good, switch to forward-testing; if that works well, they gradually increase position size. Looking at printouts of historical results is a nice start, but don’t let good numbers lull you into a false sense of security. The profit-loss ratio, the longest winning and losing streaks, the maximum drawdown, and other

    tweak it, adding or changing minor features, but its basic principle remains unchanged: making trading decisions using a sequence of timeframes and indicators. 39. TRIPLE SCREEN TRADING SYSTEM 155 Triple Screen applies three tests or screens to every trade. Many trades that seem attractive at first are rejected by one or another screen.The trades that pass the Triple Screen test are much more likely to succeed. The Triple Screen combines trend-following indicators on long-term charts with

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