This brief book will teach you the essentials of computerized technical trading. It will introduce you to self-organization and risk management, but zoom into technical trading tools. We’ll cover indicators, several trading systems, setting profit targets and stops, and much more.
What’s unique about this book is that all of its charts, tools, indicators, and systems have been programmed and are waiting for you at www.Stockcharts.com. If you have different software, you can still use this book because its concepts are universal.
DO NOT buy this book if you are a paid-up member of StockCharts – they will give this book to you. If, on the other hand, you’re looking for trading software or have another package you like, this book is definitely for you.
Most beginners jump into trading unprepared. They remind me of new skiers who hop into a gondola and ride to the top of the mountain without a clue how to ski down its slopes. Even if you already have some experience, you’ll find much that is useful and surprising in this book. On the other hand, if you’re already a professional trader, this may be too basic for you, and I’d refer you instead to my main book, The New Trading for a Living.
My goal in writing this book was to help you avoid common pitfalls and master the key principles that will serve you for the rest of your trading life. Thanks to StockCharts.com, you’ll be able to start using my templates and tools without delay.
Free updates and the honor code
Markets are tough
Two steps that will put you ahead of the crowd
How this book is organized
How to control risk
Good records make good traders
Choosing software (Why StockCharts)
Let’s create a chart (actually, two charts)
Dressing a naked chart: a pair of moving averages
Profits from manic-depression (using envelopes)
The power of bulls and bears (MACD indicator)
May the force be with you (Force Index)
Less is more (other indicators)
The trades to avoid (the Impulse system)
Every trade deserves a name (the system you trade)
Buying pullbacks in an uptrend
Catching reversals (false breakout with a divergence)
An end-of-day trend-following system (by Kerry Lovvorn)
Trading with fundamentals and technicals (by Philip Wu)
The sweet spot (what timeframe will you trade?)
Stops, targets, and risk control
Your visual diary
The road ahead
Dr. Alexander Elder is a professional trader and a teacher of traders. He is the author of 14 books, including The New Trading for a Living and Come into My Trading Room (Barron’s 2002 Book of the Year), considered modern classics among traders. Dr. Elder is the founder of SpikeTrade whose members compete for best stock picks each week. He is an active trader and a sought-after speaker at conferences in the US and abroad.