The New Trading for a Living: Review

The New Trading for a Living: Review


The New Trading for a Living: Review

I first read the original version of this book over eight years ago, and it was the book that finally gave me the overall structure I needed to understand all the dynamics of trading. I have read hundreds of trading books, and this one still stands head and shoulders above the rest. It explains how to  manage the risk, overcome negative psychology, and the importance of developing and following a trading method.

I especially like the clarity of the charts in this new edition. Dr. Elder used charts from the website, and I rely on these charts everyday.

If you read and follow the principles in this book, you will make enough money on your trades to pay for this book many times over. I have been an active participate in the markets for over 20 years, as both a trader and investor, and I agree with Dr. Elder completely, having experienced the greed, fear, and mistakes that he illustrates. Read this book and save yourself a lot of unnecessary losses of both financial and mental capital.

The first section of this book teaches you the psychology of successful trading:

1) You must be committed to being a trader for the long haul.

2) Learn all that you can, but be skeptical, go with what works.

3) Develop a method for analyzing the market.

4) Develop a money management plan.

5) Do not get greedy and rush into trades.

6) Understand that you can be your own worst enemy through greed, fear, and emotions.

7) You must change to be a profitable trader.

Dr. Elder explains, in great detail, his own trading tactics and methodology. For example, in the Risk Management section, he covers the most important strategy of when to exit. He suggests setting a stop-loss on every trade so you keep losses small. He also emphasizes the importance of protecting profits with trailing stops, and never risking more than 2% of your account on any one trade. He also warns against losing more than 6-8% of your account in any one month.

A critical point made by Dr. Elder, is that professionals in any field do not count their money daily. Traders should focus on their trading, and not their daily, paper profits. Traders should focus on following their trading plan and let the profits take care of themselves. Dr. Elder’s background in psychology makes him the perfect person to explain the pitfalls of trading emotionally and without discipline.

Buy this book. Dr. Elder has written one of the most all-encompassing trading books on the market today. You will profit from it, whether you are a beginner or an advanced trader. It will make you more professional and logical, and it will show you that traders are only profitable by trading a winning method, using risk management, and psychological discipline.

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