Forex Book

5 Reviews

1. Lance:

   Alexander Elder also wrote the acclaimed book, “Trading for a Living”. It is one of my most cherished books on trading. It was this book that gave birth to some of the modern indicators like the ‘Force Index’ and is regularly employed in my chart software. I had to read Elder’s “Come into My Trading Room” as I aspired to learn more about the ‘Force Index’. Indeed, I found some additional advice and I learnt a lot from some of the things shared by Elder:
   1. “Some of the best trading opportunities occur after false breakouts” – There is proof all around that this is happening a lot nowadays and I regularly use my Momentum Divergence indicators to distinguish between the real and the fake breakouts. Elder wonderfully helps the understanding of the reader by showing many charts periodically in his book and uses them to explain to the user all the examples he takes. To effectively trade in the modern market, it is imperative to understand the concept of divergence to trade. This book does just that.
   2. Triple Screen – Elder elucidates the need to employ multiple time frames though he restricts the number to a maximum of three. The chief idea here is that no matter which time frame you are in, you will need to do the same analysis in the next time frame to be sure of your result. This help you in getting a more long term trend and the type of trading you are in and this knowledge empowers you to go back to the short time frame and take your decisions more effectively.
   3. Grade Your performance – Elder prefers the use of numbers to grade your own progress by setting a standard for every stock and then goes on to calculate the ratio of the stock the trader achieved. It is not important which direction the progress is in, it has to be analyzed to determine the next step so as to constantly get better.
   4. The SafeZone Stop – I have not yet tried out this indicator in my trading yet but Elder’s SafeZone Stop looks to be a highly efficient way of trading than using the standard moving averages. The SafeZone Stop seems to acclimatize to trending versus flat periods with reference to any stock as compared to the moving averages. In my opinion, this technique can be of much more value which would be a lot more than just the price of the book.
   5. Chapter 9: Trading for a Living – Elder takes the reader through the learning stage till the stage of being a professional trader. This journey is completed in this chapter and it is also outlined in other parts of the book. Many topics, like trading discipline, managing time, organizing and developing a feasible strategy are tackled in this chapter.

   In the end, this book makes for a wonderful and informative read and is an excellent continuation of his “Trading for a Living”.

   17 November 2010, 8:37 am

2. Val:

   Being the author of “Trading for a Living” the book had to be good and indeed it is very well structured. Still, I was left disappointed.

   It mainly tells about the importance of entering during a pullback and also talks about the best time to exit at the time of extension to the outer band (envelope or channel, doesn’t matter). Most of the “Elder Indicators” are actually those that have been in existence for quite some time and have been modified slightly. The CDs for these are readily available and the whole book could easily have been cut down to a 3-4 page PDF file without having to leave out any of the concepts mentioned in the book.

   The author has cautioned the readers about day-trading and is skeptical about the profitability that may result from it. Due to some reason, he has chosen to ignore all the successful day-traders active. His only reason for his hypothesis is that his methods will not be apply to the day traders easily. It highlights his arrogance and narrow mindedness.

   Something that is really confusing is his usage of trend-following systems while warning against other systems but still the chart examples in the last section are all counter-trend trades! Each of them is exactly the opposite of what he has written about in his book! One wonders why he didn’t even come up with a single example that presented trading using any of his methods given in the book.

   After I read the book, I joined the author’s mailing list and even after two years had passed, there wasn’t even a single instance presented that actually went in accordance to his methods. On the contrary, numerous opinions are given about the market directions for the markets of copper, oil and the S&P 500. The opinions are all from a guru who tells others not to have opinions at all about market direction. More so, all of them turned out to be wrong! All this sets me thinking, was the masterpiece, “Trading for a Living”, a stroke of luck?

   17 November 2010, 8:38 am

3. Cheep:

   In my opinion, Dr. Alex Elder’s first book “Trading for a Living” is like a bible for every trader. It explains the nuances of trading and it has everything a young trader needs to make up for the experience. Even for experienced traders it has useful and modern tips. If a trader had picked up Dr Elder’s first book in 1993, he would now be leading a very good life.

   If I compare “Trading for a Living” to the Old Testament then his new book, “Come Into My Trading Room” is definitely worthy of being the New Testament. With all the appreciation to both Bible and Dr. Elder, all of them are wonderfully written monuments of perfection.

   Dr. Elder begins his new book essentially where he signed off in his first book. The book took in all three years to complete. He uses his well known Trader’s Camps to take feedback and has incorporated the statistics into his book. His invaluable experience and his complete knowledge of the factors leading to loss of money while trading are very helpful to all types of traders.

   Dr. Elder presents his 3 Ms – Mind, Method and Money, as the necessary requirements for being an extraordinary trader. He has explained them as:
   • Mind, which conveys the importance of having control over your mind and maintaining a cool temperament to take you through the topsy-turvy market.
   • Method, as a procedure to go through the prices and interpret them to form a sequence of steps which will predict your next decision.
   • Money, which basically points out the importance of managing your money properly and risking only that part of your savings which you can afford to.

   Dr. Elder wonderfully describes many such concepts and goes on to teach the reader the way to become a celebrated trader. In all his lessons, he gives detailed steps on applying the indicators, using the 3 Ms and planning your trading. The average reader should however, beware. This is a book targeted at a specific audience and is not easy to understand. Reading it once will not be enough and you will have to refer to it each time you make a decision. I would recommend every kind of trader to get this book.

   17 November 2010, 8:38 am

4. VOD:

   “Trading for a Living” helped me in many ways and I learnt a lot of important lessons from the book.

   I feel that the second book did not succeed in saying something greatly different from the previous book. I gave it 2 stars.

   The book chiefly points out the importance of trading following the trend using the value points the trend currently seems to follow. As already revealed by a reviewer, the later section of the book does not tackle any example doing so. The haphazard nature of the book leave the readers confused and wonder whether the methods given in the book are actually tested by the author or if it is just a gimmick.

   The book can be bluntly classified into the Mind, Method and Management sections.

   The first section deals with the psychology of a trader and is well organized. Even then a better interpretation of the Mind can be obtained by reading a few better books like Mark Douglas’ “Trading in the Zone” or even “The Discipline Trader”.

   The second section on the Methods of trading is hardly anything special. If prior to reading this book you already know the definition of a trend and can interpret its behavior effectively, there is little to gain from this book. The section on multiple timeframe analysis, called Triple Screen method in the book, does make for a good read though.

   The part where the author points out the importance of the risks attached to managing your Money can have negative rather than positive effects on the trader. Even traditional methods have cautioned the trader that keeping a per trade risk (the author recommends 2%) would cause the equity curve to be extremely volatile. If you want to read about risk management, buy “Trade Your Way to Financial Freedom” by Van K. Tharp or any similar book to learn better.

   As many have said, at times it is better to go through several sources , instead of a single one, to learn in a better way.

   17 November 2010, 8:38 am

5. rofled:

   “Trading for a Living”, the first book by Dr. Elder taught me a great deal. I read a lot of trading books and almost half of them would be rubbish and the other half I keep on my favorite bookshelf. “Trading for a Living” is one of them. When I finished reading my early release copy of “Come Into My Trading Room” I must say I did not get what I had expected by a long way.

   A great percentage of the material in this book had already been introduced in his previous book. The Price-MACD histograms, Force Index are all still used in this book to interpret the trend and explain entry points. The Triple Screen method is also talked about that now employed a moving average instead of the weekly-histogram.

   Despite that, a few new concepts also find mention in his new book. The Chandelier method of stop immediately managed to replace the ATR method I used earlier. The “Impulse Method” is also introduced which teaches a contemporary way to enter trade, though you might benefit more by taking the advice of a discount broker if you intend to use this. He also manages to take ahead the subject of management of money which he initiated in his first book.

   The experience of purchasing this book was fulfilling as for me it was seeing an old friend after a long time. For the readers newly introduced to Dr. Elder, you should start buy getting “Trading for a Living” and it’s workbook. It is a masterpiece and will help you take the plunge into the trading world. Once you do that, show your appreciation for Dr. Elder by purchasing this book using the profits he helped you make.

   17 November 2010, 8:38 am