Come Into My Trading Room

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Written by Book Reviews

If you are serious about becoming a trader, to either supplement your income or transition into full time, you must read this book. It should be kept in a prominent place on your book shelf for quick referral. This book is for traders not investors. It is important that you understand the basics of the market before reading this book to get its full value. Here are some of the key learnings:

Investing is putting money in a good stock you will hold over a long period. Gambling is putting money in a stock based on a tip, or guess with little or no understanding of the technical or fundamental value of the stock. Trading is speculating that a stock will go up in a short amount of time based on its technicals and price movement. Stock prices for the most part move based on resistance and support for its price in a range until a catalyst moves it up or down to new levels.

It is better to stalk one stock or a few that you know very well than many that you do not.

The Big Three-Mind, Method, and Money

Mind-You must have iron discipline to stay on your system and work your preconceived plan, do not let fear or greed take you astray.
Method-You must develop a good system that gives you an edge over the market. You must trade consistently based on your system.
Money-Limit your risk to no more than 2% of your money per trade, and no more than 6% exposed to risk at any one time. After you lose 6% in a month you are done for that month.

You will receive a lot of information on technical trading along with excerpts from his trading diary. All good traders keep very detailed records of their trades.

It is great that Dr. Elder adds in a few pages on the importance of managing your personal finances and freeing yourself from consumer debt and over spending. I agree that you must master your personal finances first before you attempt to become a successful trader.

I have returned over a 20% average over the past 4 years in my investments
and for me Dr. Alexander Elder is to trading what Warren Buffet is to investing.

Tags: trading, Forex Research, Trading Day,