They assume that if they get the entry right, the trade will take care of itself. Professionals, on the contrary, understand that monitoring the reward-to-risk ratio of an open position and exiting at the right price and time is absolutely fundamental to their success. If perfection is possible anywhere, it is certainly not in trading.
No one can consistently pick the absolute tops and bottoms. Good trading means taking reasonable profits and limiting losses. Reaching for extremes is not a viable long-term strategy. Leaving some money on the table is a normal and even positive thing. When it comes to profits in trading, the power word is "enough. In Sell and Sell Short , Dr. Alexander Elder explains how to set profit targets and stop-loss orders prior to entering any trade. He shares real-world examples that show how to manage your position by adjusting your exit points as the trade unfolds.
Specifics include:. How to control risk by linking the placement of your protective stop with your money management and position size. How to adjust your targets when market conditions change or your stock blows through the initial profit target. Stocks go down as well as up, but most market participants only go long—effectively throwing out half of their profit opportunities. Elder shows that stocks tend to fall twice as fast as they rise.
This provides great opportunities for faster profits in selling short, but calls for different strategies than when trading from the long side.
Shorting—profiting from market declines—is one of the favorite games of market professionals, and they account for the bulk of shorting in most markets.
Whenever you see a situation in which the mass of amateurs is crowding one side of an issue, while the more experienced and better capitalized professionals are on the opposite side, ask yourself—which side is more likely to win? That is the side of the market which you want to be on. Save Not today. Format ebook. ISBN Series Wiley Trading. Author Alexander Elder.
He buys when the price is lower than the value and the price is looking as it is about to turn up. He sells when the price reaches the value zone, or he might ride it a little further into overvalued territory if the momentum of the share price is really strong. He sells short when the stock is in expensive territory and has started to decline and then covers his position when the stock is back down in the value zone. While buying is fun and offers opportunities, selling is an unsmiling business.
This is why books on selling are important but rare. If it goes in the right direction he is torn between taking profits but then risk not taking part in potential further profits. Covering short positions very much follows the same logic only with the price trend turned on its head. The key message is that to succeed any investor must do what suits his own disposition. This book is highly recommended for the swing trader looking to profit from all types of short-term price movements — but also for those interested in understanding equity markets and investment psychology at large.
Jul 07, Doug added it. Good book - should have read the other two first. Alexander Elder has created a valuable guide to using certain reliable economic chart indicators to predict when price will change direction and revert to its moving average.
He includes plenty of charts and includes demonstrations with stocks and other securities; he includes a trade on the price of gold, showing that his system works there. He also includes valuable anecdotes about how people sometimes give him unintentional "signals" that a market has peaked and it is time to sell.
He cau Dr. He cautions us that "the market does not exist to put money in the hands of amateurs," but his goal in writing this book is to show people that they too can trade for a living with a consistent success rate and eventually quit their day jobs, so that is enough reason to check it out. Elder relies on relatively complex technical analysis. Not for me but if you are a full time trader, you may find value in his systems.
Jan 26, Todd rated it really liked it. Excellent book, but a lot of material was previously covered in Dr. Elder's 2 previous books. Alexander Stautner rated it really liked it Mar 17, Benjamin de Weerdt rated it really liked it Sep 21, Patricia rated it it was amazing Aug 03, Cleo rated it really liked it Jul 02, John Hill rated it it was amazing Jan 21, Hendrik Swanepoel rated it really liked it Oct 30, Ayomide Adeware rated it it was amazing Oct 25, Elder explains why traders and investors who limit themselves to long positions are conceding a big advantage to market professionals who are just as likely to go short as go long.
Stocks tend to fall much faster than they rise, which means that big profits can be made quickly — if the right strategies are employed. Elder shows traders how to identify a market top, how to jump on a downtrend, and how to monitor short selling activity in order to better manage a short position. Ultimately, Dr.
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