Everand Logo

Welcome to Everand!

  • Discover millions of ebooks, audiobooks, and so much more with a free trial

    Only $11.99/month after trial. Cancel anytime.

    Study Guide for The New Trading for a Living
    Study Guide for The New Trading for a Living
    Study Guide for The New Trading for a Living
    Ebook170 pages1 hour

    Study Guide for The New Trading for a Living

    By Alexander Elder

    4.5/5

    ()

    Read preview

    About this ebook

    Test your trading knowledge and skills—without risking any money

    You may read the best trading book, but how much of that knowledge will you retain a week later? This is why you need this Study Guide for The New Trading for a Living. It'll give you a firmer grasp of the essential trading rules and skills. This Study Guide, based on the bestselling trading book of all time, was created by its author to help you master the key points of his classic book.

    The Study Guide's 170 multiple-choice questions are divided into 11 chapters, each with its own rating scale. They cover the entire range of trading topics, from psychology to system design, from risk management to becoming an organized trader. Each question is linked to a specific chapter in the main book, while the Answers section functions like a mini-textbook. It doesn't just tell you that A is right or B is wrong—it provides extensive comments on both the correct and incorrect answers.

    This Study Guide also contains 17 charts that challenge you to recognize various trading signals and patterns. Everything is designed to help you become a better trader.

    Consider getting two books as a package—the Study Guide and The New Trading for a Living. They're designed to work together as a unique educational tool. The Study Guide for The New Trading for a Living is a valuable resource for any trader who wants to achieve sustainable market success.

    LanguageEnglish
    PublisherWiley
    Release dateSep 30, 2014
    ISBN9781118984703
    Study Guide for The New Trading for a Living

    Read more from Alexander Elder

    Related to Study Guide for The New Trading for a Living

    Titles in the series (100)

    View More
    View More

    Related ebooks

    Finance & Money Management For You

    View More
    View More

    Related podcast episodes

    Related articles

    • Article

      He Learned to Trade for Profit - and Can Teach You, Too

      Jan 31, 2019

      Raymond Rondeau, 55, of Exeter, R.I., is a trader, president of the New England American Association of Individual Investors chapter, and creator of AAII's new course, "Investing Strategies and Technical Analysis." When did you start trading? I began

      2 min read

    • Article

      Thinking About Day Trading? Read This First

      Sep 22, 2020

      In the midst of the pandemic, you may have noticed a rather unusual trend: More and more people are jumping into the stock market. Despite, or perhaps even because of, extreme volatility in the market and endless speculation about what could happen n

      3 min read

    • Article

      Discipline Goes A Long Way

      Mar 31, 2022

      The life of a trader is not what most of us might imagine it to be – that is, glamorous, exciting and paved with gold. More likely it is solitary, private, a bit boring and, when done right, provides a living. We could all be traders. We could all be

      5 min read

    • Article

      Learn How To Spot A Rip-off

      Feb 24, 2021

      Learn How To Spot A Rip-off
      3 min read

    • Article

      The Magic of Moving Averages

      Jan 31, 2019

      When price charts begin to look like jagged mountain ranges, it can be hard to map out which way stocks are headed. Enter the simple moving average. The tool is a staple of technical analysis--the practice of determining the direction of stock prices

      2 min read

    • Article

      How To Set Yourself Free

      Sep 2, 2020

      One of my clients retired at 50 to become a full-time trader, hoping he could shrug off the rat race and the typical work-sleep-work life. Fifteen years later he is still “retired” and still trading full time. Now he calls it what it turned out to be

      6 min read

    • Article

      How Investors Can Prosper With Technical Analysis

      Feb 6, 2019

      Many investment advisors and money managers have a little secret. They will proudly tell you that they rely heavily on fundamental analysis, carefully weighing earnings, market share, competitive environment and demographic trends to select the best

      5 min read

    • Article

      RSI Alone Not Enough

      Sep 18, 2020

      oscillators, such as the relative strength index (RSI) and stochastics, are often used as signals for overbought and oversold zones. Let’s use the RSI as an example. Generally, an RSI set on 14 days is considered over-bought above the 70 level, but t

      1 min read

    • Article

      What I Learned from Losing $200 Million: The 2008 financial crisis taught me about the illusion of control, and how to give it up.

      Dec 24, 2015

      I’d lost almost $200 million in October. November wasn’t looking any better. It was 2008, after the Lehman Brothers bankruptcy. Markets were in turmoil. Banks were failing left and right. I worked at a major investment bank, and while I didn’t think

      15 min read

    • Article

      Covered Calls: One Way to Earn Extra Income on Your Stocks Without Additional Risk

      May 2, 2018

      "Boy, I would definitely sell Apple if it reached $170 again," a client said to me recently. Like many people, she believed entering a limit order at that price was the logical next step. As we explained, however, writing a covered call option might

      3 min read

    • Article

      Are You Gambling or Investing? Here’s How to Tell

      Mar 2, 2021

      Investing in the stock market over many decades offers most people an incredible opportunity to build wealth. Does that surprise you? If so, you’re not alone. Over the course of my career as a financial planner, I’ve found that many people look at th

      4 min read

    • Article

      Technical Analysis Tools For Long-term Investing

      Oct 30, 2020

      in the 22 October issue of finweek, I wrote about how I am trying my hand at trading local equities for the first time in over a decade. Some aspects of my index trading have helped (discipline and risk management), but stocks are more volatile and n

      2 min read

    • Article

      Change In Sentiment

      Oct 2, 2020

      Change In Sentiment
      1 min read

    • Article

      How to Make Market Volatility Work for You

      Apr 5, 2018

      There are more certainties in life than just death and taxes. For instance: If you invest money in the stock market, you certainly will face market volatility now and then. Periods of high volatility are normal. Investors need to understand that life

      4 min read

    • Article

      What Benchmark Should You Use to Measure Investment Success?

      Feb 6, 2020

      One of the biggest mistakes we see people make with their investments is to try and compare their portfolio performance to "the index." We'll hear comments from clients (and friends, and family and people in passing) that go something like, "The inde

      3 min read

    • Article

      7 Stockbroking Secrets

      Apr 1, 2020

      7 Stockbroking Secrets
      5 min read

    • Article

      Check, Please

      Apr 4, 2023

      Check, Please
      7 min read

    • Article

      HOW'S YOUR SALES & MARKETING STRATEGY PROGRESSING?

      Oct 19, 2022

      How do you know if your sales and marketing strategy is going to work? First things first - do you have one? Because defining a strategy is the start of the process. Then you have to be confident it will work. And finally, you need to prove that it w

      2 min read

    • Article

      Should You Divest A Company You No Longer Believe In?

      May 8, 2019

      Why would you invest in a company you don’t believe in? As a financial adviser, I aim to not only improve my clients’ financial positions but to also get capital working for better environmental or social outcomes. We do this by having a conversation

      2 min read

    • Article

      Ideas That Work

      Sep 22, 2021

      Ideas That Work
      4 min read

    • Article

      To This Issue Of ThinkSales Magazine

      Jun 30, 2021

      This magazine comprises five sections – each aligned with the 5-Pillars of high-performing Sales Organisations – and provides actionable insights for consideration. At the end of each section, you’ll find a planning and implementation guide, with que

      2 min read

    Related categories

    Reviews for Study Guide for The New Trading for a Living

    4.5/5

    6 ratings0 reviews

    What did you think?

    Tap to rate

    Review must be at least 10 words

      Book preview

      Study Guide for The New Trading for a Living - Alexander Elder

      Experienced traders seem to glide through the markets, swinging into and out of trades. Their trading appears effortless, like downhill skiing on TV. The illusion of ease vanishes when you clamp on a pair of skis and discover the bumps on the slope. If you want to improve your trading skills, you have to work, study, and do your homework.

      I created this Study Guide to help you grow and succeed as a trader. It is based on my years of experience as a trader and teacher of traders. The more you study the markets and your reactions to them, the more likely you are to succeed. You need to learn more about yourself as well as the markets—good traders always learn.

      Each question in this Guide is linked to a specific chapter in The New Trading for a Living—psychology, risk management, indicators, and so on. Write down your answers and compare them with those in the book. When answering chart-related questions, cover each chart with a sheet of paper and move it slowly from left to right to imitate the unfolding of market action. Practice dealing with the uncertainty of the markets while working with this Guide.

      This Guide asks questions and provides answers—but reasonable people may dis­agree with some of them. Trading is partly a science and partly an art—partly objec­tive and partly subjective. Let this Guide challenge you to think deeper about the markets and your reactions to them.

      I am grateful to Henry Abelman and Jeff Parker, both repeat winners of Spike Trade's Eagle Eye award, for reviewing all questions and answers. Carol Keegan Kayne did the final check for clarity and precision.

      Thanks to my former professors and students at the universities in Estonia and the United States for providing many opportunities to teach and develop my educational style.Thanks to the members of SpikeTrade.com, who keep sending me trading-related questions. Posting answers to them week after week keeps me on my toes.

      I hope this Guide helps you to sharpen your skills and to become a better, more confident trader.

      Dr. Alexander Elder

      NewYork—Vermont, 2014

      QUESTIONS

      AND

      RATING SCALES

      Introduction

      To win in trading, you must outperform masses of competitors. The majority must lose in order to pay those who win. To become a successful trader, you must beat the odds against you. You must learn to think and act differently from the market crowd.

      The New Trading for a Living contains several unorthodox trading ideas. The aim of this Introduction is to pause at the beginning of the journey and to see whether you are in tune with some of the unconventional thinking about trading.

      Question 0-1

      Which of the following methods of making trading decisions can serve traders well in the long run?

      Fundamental analysis

      Inside information

      Hunches and tips

      Technical analysis

      I and II

      II and III

      I and IV

      III and IV

      Question 0-2

      Which of the following isn't needed for trading success?

      Trading psychology

      Analytic method

      Connections with market insiders

      Money management method

      Question 0-3

      The best approach to reading a book on trading is to

      test all the ideas that interest you on your own market data.

      incorporate all the ideas in your work.

      not trust what you read—why would anyone share good trading ideas?

      ask other traders whether the ideas in the book worked for them.

      Question 0-4

      Which of the following is not a major cause of trading losses?

      Slippage

      Commissions

      Emotional trading

      Theft

      Question 0-5

      Trader Jim and Trader John take the opposite sides of a trade. Both pay commissions, and both get hit with slippage. Trader Jim, the winner, collects $920, while Trader John, the loser, is out $1080. The result of this trade illustrates the fact that trading is a:

      Zero-sum game

      Positive expectations game

      Random Walk

      Minus-sum game

      Question 0-6

      You find a stock trading at $20 and plan to buy 100 shares. Your broker will charge a commission of $ 10. Which of the following statements is incorrect?

      When dealing with thousands of dollars, don't quibble about $ 10.

      You need to make 1% profit to avoid losing money on this trade.

      Using 50% margin, you need to make more than 2% profit to avoid losing money on this trade.

      Question 0-7

      You place a market order to buy 100 shares of a rising stock that currently trades at $20. Your order gets filled at $20.08. Your slippage on the trade is

      80 cents

      $8

      $16

      $80

      Question 0-8

      The stock you bought in Question 7 rallied to $22. You expect the rally to continue but raise your stop to $21 to protect half of your paper profit. The stock sinks and hits your stop—you get filled at $20.88. Your slippage on this trade represents what percentage of your gross profit?

      5 percent

      10 percent

      25 percent

      50 percent

      Question 0-9

      In the trade described in Questions 7 and 8, the trading industry took what percentage of your gross gain?

      25 percent

      50 percent

      75 percent

      100 percent

      Individual Psychology

      Your greatest danger in trading comes from the person holding this book—you. Our emotions often tip the scale between winning and losing. If you can stay cool and make rational decisions, trading profits will follow.

      A professional trader is calm and collected. He knows what he'll do if the market goes up, down, or sideways. On days when he is not sure, he stays out, patiently monitoring the market from the sidelines. A pro feels in control.

      If you feel giddy with joy when the market goes your way but freeze in fear when it swings against you, your actions will be emotional and your account will suffer. When the mind becomes clouded by greed or fear, even the best trading systems fly out the window. The questions that follow are designed to help you focus on trading psychology.

      Question 1-1

      A successful trader's attitude toward risk is usually one of

      avoiding risk.

      thriving on risk.

      enjoying risky situations, even though losses hurt.

      measuring each risk.

      Question 1-2

      The goal of a successful trader is to

      become the best trader he can.

      make more money than other traders.

      buy things that will set him above other traders.

      win respect of family and friends.

      Question 1-3

      A trader on a losing streak has lost 20 percent of his account. He would best be advised to

      subscribe to a newsletter with a verified track record.

      purchase a trading system with a history of profitability and low drawdowns.

      stop trading until he has analyzed his losing trades and determined their causes.

      continue to trade because the laws of probability indicate a likely turn in his favor.

      Question 1-4

      Having a large trading account is desirable for all of the following reasons except that

      you can afford to lose more.

      you can diversify among more markets.

      you can trade different systems.

      your expenses represent a smaller percentage of your account.

      Question 1-5

      Which two of the following statements about commercially sold trading systems are most accurate?

      A track record provides confidence that a system will continue to perform well.

      The fact that a system is sold by a prominent trader provides an extra margin of confidence.

      Trading systems are designed to fit old data, and they self-destruct when markets change.

      You can buy a system from a top analyst and lose money using it.

      I and II

      I and III

      II and III

      III and IV

      Question 1-6

      Which of the following is a key sign of a gambling attitude toward trading?

      The inability to resist the urge to trade

      Feeling elated when trades go well and ashamed after losing

      Always reversing losing positions

      A string of trading losses

      I only

      I and II

      I, II, and III

      I, II, III, and IV

      Question 1-7

      Within a year, all of the following occur in the life of a trader: he receives three traffic tickets, pays a penalty for filing his taxes late, gets two reprimands for tardiness on his non-trading job, and his trading account is down 35

      Enjoying the preview?
      Page 1 of 1