Originally published at: https://blog.12min.com/the-new-trading-for-a-living-summary/
Psychology, Discipline, Trading Tools and Systems, Risk Control, Trade Management
Are you on the fence, unsure of your next move?
Investors understand your concerns and share your way of life.
This summary is a good starting point for launching a lucrative career in the realm of investments.
Who Should Read “The New Trading for a Living”? And Why?Nothing comes close to making an honest living while doing something that generates a stable cash flow on the long run. Investors know the burden of several factors, which suffocate such possibility.
“The New Trading for a Living” is a brand-new revelation, unveiling practical hints that can get your investment efforts to the next level. As such, we strongly recommend it to economists!
About Dr. Alexander ElderDr. Alexander Elder was born in Leningrad, in the Soviet Union. It’s fair to say that he is an expert in trade and an author who spent years in finding the perfect formula.
During his time as a psychiatrist, he learned a lot about human behavior and used that expertise in the professional areas of development.
"The New Trading for a Living Summary"Are you impatient to become a wealthy investor? Wait a minute; even Warren Buffet had a strategy before he became an investor of the highest order.
Getting a stock tip is much easier than understanding the whole system. So, let’s move slowly until all the mysteries are out in the open.
Every stock trader should take into account a phenomenon named trade commission. Perhaps the movie – “The Wolf of Wall Street” is a tip enough for understanding the grave danger emerging from this pitfall. Paying 10$ per commission can lead to astonishing $2,000 – 10,000 of yearly expenditure.
Next in line is slippage. What does this mean? – You need to fill in order and decide whether you prefer a limit or a trade one.
The first one (limit) indicates that you intend to purchase a stock for a certain sum. Trade order pinpoints that you’ll get your stock, but under what circumstances – no one knows.
Unfortunately, many people are misled when it comes to trading. Do you like making money at a speed of light? It doesn’t work that way, and many gamblers became aware of this eye-opening reality.
What should we do? First things first – control your urges. Even the greatest investors have absolutely no idea regarding the stock’s route, and neither do you.
If you rely on the emotional response when things are going in your favor or not, you are the perfect candidate for experiencing a downfall in financial terms.
How to stand out from the herd? Indeed, it’s against all instinct to go on your own. For centuries, people have gathered in communities to improve their chances of survival and guess what – nothing has changed since then.
Seeking the safety of the crowd is the first thing you should avoid, and it’s not always easy to subdue these urges.
How to put such practice into action? It’s vital to divide the market and analyze the behavior of all participants.
According to the author, there are two types of behavior: bulls and bears. Bulls emphasize the value of prices going up; bears – the other way around.
Making a good decision is feasible only if the trader is willing to do the necessary testing.
A highly competitive market indicates that there is a high price fluctuation, and you ought to distance yourself from such environment.
But let’s dissolve all the vital parts:
In order for a cost-effective strategy to kick in, one must leave no stone unturned. What must you understand and interpret well, before plunging into a trade battle?
- Opening Prices
- Closing Prices
- All the Highs of a Bar
- The Lows
- The difference between these two
Overheated markets are not advisable, and if you plan to remain profitable, you’ll not be thinking about such endeavors.
Key Lessons from “The New Trading for a Living”1. Follow the trends in order to make the market work in your favor 2. One should opt for stock-trade at the beginning 3. Act wisely and slowly; rush decision-making is a one-way ticket to failure
Follow the trends in order to make the market work in your favorThe price level can often mislead the people into purchasing a specific stock.
As soon as the market gets the support it desperately needs, you’re on the scene of a downward price trend.
The past fluctuations of the stock-price act as though the investor needs no incentive nor knowledge to conduct the next trade.
One should opt for stock-trade at the beginningAlthough there are plenty of opportunities available regarding the trading business, it’s best if you stick to grounds that best suit you.
Options, futures, and ETFs are more complicated for those who are about to launch their trading campaign.
Act wisely and slowly; rush decision-making is a one-way ticket to failureOnce you decide, which way appeals to your particular nature – you must never forget to pay exclusive attention to these trade factors: liquidity and volatility.
Liquidity manifests the daily volume of exchanged shares, and it actually stands for:
Higher Liquidity = better trading options.
Volatility is best explained as a phenomenon that observes the price of a stock in the short-run.
Higher volatility = more opportunities for capital growth and vice versa.
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“The New Trading for a Living” Quotes[bctt tweet="The mental baggage from childhood can prevent you from succeeding in the markets. You have to identify your weaknesses and work to change. Keep a trading diary—write down your reasons for entering and exiting every trade. Look for repetitive patterns of success and failure." username="get12min"]
[bctt tweet=“The answer is to draw a line between a businessman’s risk and a loss. As traders, we always take businessman’s risks, but we may never take a loss greater than this predetermined risk.” username=“get12min”]
[bctt tweet=“To help ensure success, practice defensive money management. A good trader watches his capital as carefully as a professional scuba diver watches his air supply.” username=“get12min”]
[bctt tweet=“There are good trading systems out there, but they have to be monitored and adjusted using individual judgment. You have to stay on the ball—you cannot abdicate responsibility for your success to a mechanical system.” username=“get12min”]
[bctt tweet=“Why do most traders lose and wash out of the markets? Emotional and mindless trading are big reasons, but there is another. Markets are actually set up so that most traders must lose money. The trading industry slowly kills traders with commissions and slippage.” username=“get12min”]
Our Critical ReviewThere is a saying – Being bold and determined is not enough for achieving success.
You need the know-how and thanks to various experts; we can now access various types of information to make that happen.
And that pretty much sums up this book, where you’ll get means of entry to see first-hand the value of being equipped with the right set of “weaponry.”