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    The Trading Puzzle
    The Trading Puzzle
    The Trading Puzzle
    Ebook102 pages1 hour

    The Trading Puzzle

    By Dr. Alexander Elder

    3.5/5

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    About this ebook

    SpikeTrade members participate in a friendly competition for the best stock picks. This competition is intense but very friendly, as members share trading ideas and tips. The authors answer members’ trading-related questions.

    As a result, there is a growing wealth of knowledge in SpikeTrade. Now, for the first time, non-members may enter that treasury and see the answers by Dr Elder and Mr Lovvorn to members' questions. Reading this book will help you solve your own market puzzles and get up to speed, while avoiding bad mistakes.

    It’s painful to see bright individuals blow up their accounts. If trading is a race between a hare and a turtle, our money is firmly on the slower guy with a hard shell on his back. Study this book to learn trade the right way.

    Book chapters include:
    * Psychology and Self-Management
    * Technical Analysis
    * Other Methods and Markets
    * Entry and Exit Techniques
    * Current Markets
    * Risk Control
    * Finding Good Data (Mini-encyclopedia)

    This book is illustrated with 48 color charts. It even contains a coupon that lets you deduct the entire cost of this book from a Trial membership in SpikeTrade.

    Dr. Alexander Elder is a private trader and a teacher of traders, based in New York City. He is the author of several international best-sellers, starting with Trading for a Living (1993). Kerry Lovvorn is a trader and a trading coach, based in Alabama. His work has been featured in several books. Together, they direct www.SpikeTrade.com – an online club for serious traders that runs a weekly trading competition.

    LanguageEnglish
    PublisherSpikeTrade
    Release dateMar 1, 2013
    ISBN9781301566532
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      Book preview

      The Trading Puzzle - Dr. Alexander Elder

      The Trading Puzzle

      Book One from SpikeTrade

      Dr. Alexander Elder & Kerry Lovvorn

      the Smashwords Edition

      Published by SpikeTrade.com

      Copyright 2013 by SpikeTrade.com

      Last revised: February 2013

      DEAR READER: electronic publishing is still in its infancy. If the fonts do not to look right on your screen, write to us with the name of your reading device, and we will do our best to help. You also may want to print out this e-book – it’ll look fine on paper. If you have any suggestions for improving or updating this book, please write to the authors. To give you better and bigger charts, we attached a link to every chart in this e-book. When you have access to the Internet, click on any chart to be taken to a special page at our website where that chart will be bigger and clearer. You may also click on the bold print below the chart to open the larger chart on our website.

      LEGAL: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means without the prior written permission of the copyright owner.

      DISCLAIMER OF WARRANTY: Although the authors have used their best efforts in preparing this book, they make no representations or warranties in respect to the accuracy or completeness of the contents. The advice and strategies contained herein may not be appropriate for your situation. You should consult with a professional where appropriate. The authors shall not be responsible for any loss.

      Table of Contents

      Psychology and Self-Management

      Technical Analysis

      Other Methods and Markets

      Entry and Exit Techniques

      Current Markets

      Risk Control

      Finding Good Data (Mini-encyclopedia)

      Answers to Your Questions

      Welcome

      We’ve created SpikeTrade.com as a meeting place for serious traders. Our members share ideas and participate in a friendly competition for the best stock picks. This competition is very intense – but also very friendly. Members ask each other questions and help one another. If, for example, a popular trader submits a stock pick for a company that’s about to announce its earnings, you can be sure that some members will write to him or her with a friendly warning that a major piece of fundamental news is coming down the pike.

      SpikeTrade is a members’ website – this is not a guru business. We let our Members take center stage – but at the same time we share our knowledge just as openly as they do. We post diaries of our trades, including video diaries. We contribute nightly reviews of key indicators and weekend market reviews. We also answer members’ questions in the section we call Q&A and Alex & Kerry.

      There is a growing wealth of knowledge in SpikeTrade archives, open to all members. We’re publishing this e-book to help non-members get up to speed and avoid bad mistakes. We took all questions and answers from 2011, slightly edited them for smoother flow and organized them into chapters.

      We hope you enjoy this e-book, and we invite you to visit our group by taking a trial membership in SpikeTrade. You can deduct the cost of this e-book from your Trial: just use the coupon code P1

      Best wishes for success,

      Dr. Alexander Elder

      New York City

      Kerry Lovvorn

      Scottsboro, Alabama

      February 2013

      Return to the Top

      PSYCHOLOGY & SELF-MANAGEMENT

      Sound psychology is essential for successful trading. Markets put up an enormous gallery of temptations, causing crowds of beginners to jump in from the deep end and lose fortunes in thoughtless trades. Good planning and sober self-management are the keys to market success.

      SpikeTrade members know the importance of trading psychology. People who voluntarily submit picks develop a habit of spelling out their plans. Submitting picks week after week develops discipline and translates into steady performance. Our Trade Journal is a great tool for developing the habits of accountability. Last but not least, our members can ask us questions about psychology and self-management.

      TO CHASE OR NOT TO CHASE

      A member from Canada writes: As Alex wrote in one of his books, ‘Don’t chase a stock, if you miss a bus, there is always another.’ I follow this rule for most of my trades. But I am struggling whether I should chase the stock when there is a gap up on a strong day like today. There is a high probability that the general market will go up. Should I jump in and put on a trade and set a logical stop below yesterday’s high? Or, should I just pass and wait for the next train to get on. But waiting for the next set up could be weeks away.

      Kerry replies:

      The answer depends on whether one is a breakout momentum trader or a pullback trader. I am a trend trader and prefer entering on pullbacks. I don’t chase breakouts. If I miss the bus, I’m not a fan of chasing and jumping in, you may jump in front of the bus and get run over.

      CLICK ON ANY CHART TO SEE A LARGE VERSION (YOU NEED TO BE ONLINE)

      Figure 1-01 SINA daily

      The problem of ‘missing the bus’ can occur with any style of trading. Here is my trade this week in SINA. On Friday it gave me a signal to enter, but I missed it. I kept this stock on my watchlist, and today SINA flashed another entry signal by tracing a V-1 Trigger [described elsewhere in this e-book – Editor].

      Although I missed the entry on Friday, I acted on today’s signal. Whenever you miss the bus, keep the stock on your watchlist, and you may well get a second opportunity.

      Another option after missing the bus is to drop down one timeframe and look for an entry. I may drop from a daily chart to my favorite intraday 39-minute chart and look for an entry there.

      TAKING LOSSES

      We’ve received several emails from members asking how to

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