The New Sell and Sell Short

DR. Alexander Elder is a professional trader, a teacher of traders, and a psychiatrist. He is the founder of elder.com and SpikeTrade.comboth of which provide educational services to traders worldwide. Dr. Elder is the author of three bestselling books, Trading for a Living (translated into more than a dozen languages), Come Into My Trading Room (2002 Barron's Book of the Year), and Entries and Exits (2007 SFO Magazine Book of the Year).

Introduction xv Why Sell? xv About the Q&A xvii Part One Psychology, Risk Management, & Record-keeping 1 Chapter 1 On Buying 3 THE Three Great Divides 3 One Traders Toolbox 7 Chapter 2 Trading Psychology and Risk Management 9 Your Mind as a Trading Tool 9 Risk Control 11 Chapter 3 On Keeping Records 13 Good Records Lead to Good Trading 13 Traders Spreadsheetbasic Accountability 14 Trading Diaryyour Key to Lasting Success 16 How to Document Your Trading Plan 20 Margrets Methodput it on the wall 24 How to Grade Your Performance 24 Two Types of Trading 26 Questions 29 Answers 45 Part Two How to Sell 57 Chapter 4 Selling at a Target 61 Selling at a Moving Average 63 Selling at Envelopes Or Channels 71 Selling at Resistance Levels 83 Chapter 5 Selling on a Stop 95 The Iron Triangle 97 Market Or Limit Orders 99 Hard and Soft Stops 101 A Bad Place 102 Reducing Slippagetighter by a Penny 109 Nics Stoptighter by a Day 110 When to Use Wider Stops 117 Moving Stops 120 A Safezone Stop 123 Volatility-drop Trailing Stops 124 Chapter 6 Selling Engine Noise 129 Weakening Momentum 130 An engine Noise Exit From a Short-term Trade 132 A Discretionary Exit From a Long-term Trade 135 Selling Before Earnings Reports 139 The Market Rings a Bell 143 Trading with the New Highnew Low Index 148 The Decision Tree for Selling 151 Questions 157 Answers 183 Part Three How to Sell Short 203 Chapter 7 Shorting Stocks 207 Your First Shorts 211 The Asymmetry of Tops and Bottoms 214 Shorting Tops 216 Shorting Downtrends 221 Shorting Fundamentals 224 Finding Stocks to Short 233 Short Interest 237 Chapter 8 Shorting Non-Equity Instruments 243 Shorting Futures 243 Writing Options 252 Forex 258 Questions 265 Answers 279 Part Four Lessons of the Bear Market 291 Chapter 9 Bears Make Money 293 The Bear Was Beginning to Stir in Its Cave 293 The Sentiment Indicators Are Early 295 The Top of the Bull Market 297 Bearish Divergence at the 2007 Top 299 The Bubble Pops: Mgm 300 Shorting a High-flyer 302 A Bear Market Is a Destroyer of Value 304 Swinging in and Out of a Major Downtrend 307 Trading in a Downchannel 308 Prepared for a Surprise 310 Bull Markets Have No Resistance And Bear Markets Have No Support 312 For Whom the Bell Tolls Or the Hound Barks Twice 315 Mr. Buffett Buys Too Soon 317 May I Pour Some Gasoline on Your Fire? 319 Keep Shorting on the Way Down 321 Chapter 10 Groping for a Bottom 325 This Stock Market Is Not Going Down to Zero 325 A double Helix Gives a Buy Signal 327 Just in Time for the Party 328 My Favorite Major Bottom Signal 331 Selling a Bull 332 Every Bull Stumbles 335 A Screaming Short 337 Conclusion 341 Handling Profitsthe Personal Dividend 342 The Road Into the Future 343 References 345 Acknowledgments 347 About the Author 349