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

303 Pages·2016·12.54 MB·English

by  Alexander Elder

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Psychology • Discipline
Trading Tools and Systems
Risk Control • Trade Management
Dr. Alexander Elder

www.elder.com
www.spiketrade.com
Cover design: Paul DiNovo
Copyright © 2014 by by Dr. Alexander Elder. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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Library of Congress Cataloging-in-Publication Data:
ISBN 978-1-118-44392-7 (Hardcover)
ISBN 978-1-118-96367-8 (ebk)
ISBN 978-1-118-96368-5 (ebk)
Printed in the United States of America
10 9 8 7 6 5 4 3 2 1
To the memory of Lou Taylor—
a wise man, a savvy trader, and a true friend.

CCOONNTTEENNTTSS
Preface xiii
Introduction 1
1. Trading—The Last Frontier 1
2. Psychology Is the Key 3
3. The Odds against You 5
ONE Individual Psychology 9
4. Why Trade? 9
5. Reality versus Fantasy 10
6. Self-Destructiveness 16
7. Trading Psychology 19
8. Trading Lessons from AA 21
9. Losers Anonymous 23
10. Winners and Losers 27
TWO Mass Psychology 31
11. What Is Price? 32
12. What Is the Market? 33
13. The Trading Scene 36
14. The Market Crowd and You 39
15. Psychology of Trends 43
16. Managing versus Forecasting 46
THREE Classical Chart Analysis 49
17. Charting 50
18. Support and Resistance 55
vii
viii CONTENTS
19. Trends and Trading Ranges 60
20. Kangaroo Tails 65
FOUR Computerized Technical Analysis 69
21. Computers in Trading 69
22. Moving Averages 74
23. Moving Average Convergence-Divergence:
MACD Lines and MACD-Histogram 80
24. The Directional System 89
25. Oscillators 95
26. Stochastic 95
27. Relative Strength Index 99
FIVE Volume and Time 103
28. Volume 103
29. Volume-Based Indicators 107
30. Force Index 112
31. Open Interest 117
32. Time 121
33. Trading Timeframes 126
SIX General Market Indicators 133
34. The New High–New Low Index 133
35. Stocks above 50-Day MA 139
36. Other Stock Market Indicators 140
37. Consensus and Commitment Indicators 142
SEVEN Trading Systems 149
38. System Testing, Paper Trading, and the
Three Key Demands for Every Trade 151
39. Triple Screen Trading System 154
40. The Impulse System 162
41. Channel Trading Systems 166
EIGHT Trading Vehicles 173
42. Stocks 175
43. ETFs 176
44. Options 178
45. CFDs 186
46. Futures 187
47. Forex 194