“An astute trader aims to enter the market during quiet times and take profits during wild times” – Dr. Alexander Elder.
Alexander elder is a professional trader and a teacher of traders. He is a great author and usually his books are for stock traders, swing traders, day traders and it is based on technical analysis for stock market. Trade for living, published in 1993, became an international – best seller. The book is based on trading tactics, psychology and money management.
Alexander says that if you want to become a successful trader, you should be disciplined and patient. He has given the best answer to the question – which market to trade? He said that no matter whichever market you trade, i.e. if you trade in futures, options or stocks they should be volatile and liquid. Volatility means the extent of movement in your market. Liquidity means the average daily volume as compared to other market options. Alexander throws light on three trading options – stocks, futures and options.
He says world of futures is very glamorous but everyone can’t do it. To be a successful trader in futures, one should have the risk bearing ability, and should have strong management skills. Once you are a matured trader, then have a look at the futures. In options, you need to be a wise trader. If the market reverses, you’ll be in a great loss. Do not let greed attract you, says Alexander.
Alexander Elder says that if you want to be a successful and a wise trader, you should be well-versed with the following:
- Trading psychology
- Technical analysis
- Money management.
According to Alexander, traders are paid to be profitable. Tremendous amount of information is available in market in the form of reports, notes, intraday charts etc is available published quarterly and annually. Analysis is very important. Fundamental analysis is the study of values, but the relationship between value and price is not direct. It is complex as different factors change with the passage of time. Technical analysis is the study of charts and graphs to find where one group has the capability to overpower the other.
The author highlights the aspects of sound trading psychology and proper money management in order to avoid the losses. An intelligent trader should pay attention to fundamentals. Identifying trends and reversals is the prime job of a successful trader. What does successful trading depend on?
It depends on 3 M’s
To sum up – trader should be of sound mind knows psychology trading , is well aware of the method and uses money management skills. Controlling risks in your trading account is very essential according to Alexander.
I like what Alexander said about broker – trader relationship. He said that your broker is just your helper. He isn’t your advisor. So don’t get carried away with it or with the emotions. A trader can’t blame a broker, he has to accept total responsibility for the decisions and actions he has made to be a successful trader.
This book is perfect for all including beginners. The specifications and illustrations which Elder has made through charts and graphs is amazing. It feels like you are in the trading room, literally trading. He has shared plenty of specific rules and tips, which gives everyone a purposeful understanding.
Alexander’s advice generic enough to help you with trading in general. For being a better trader tomorrow, you have to gain knowledge from your first trade, whether you win or you lose. Elder sums up by saying that you should Scan the fundamental information, read technical signals and implement rules of money management and risk control.