Trading Basics: Evolution of a Trader begins with the basics, creating a solid foundation of terms and techniques. Although you may understand market basics, you will learn from this book. Trading Basics takes an in-depth look at money management, stops, support and resistance, and offers dozens of tips every trader should know.
Introduction:
Here are some facts that you will discover by reading this book:
- Trading a constant position size can have disastrous results.
- A market order to cancel a buy can be denied if it is within two minutes of the Nasdaq’s open.
- Dollar cost averaging underperforms
- Fibonacci retracements offer no advantage over any other number as a turning point.
- A chandelier stop hangs off the high price.
- Stops cut profit more than they limit risk.
- Peaks with below average volume show more resistance.
- The middle of a tall candle is no more likely to show support or resistance than any other part.
- Fibonacci extensions are no more accurate than any other tool for determining where price might reverse.
- Only bullish divergence (in the RSI indicator) works and only in a bull market.
- Bullish divergence (in the RSI indicator) fails to beat the market more often than it works.
- Price drops faster than it rises.
- The industry trend is more important than the market trend.
- Holding a trade too long is worse than selling too early.
- Sell in May and go away.
Contents:
- How to Retire at 36
- Money Management
- Do Stops Work?
- Support and Resistance
- 45 Tips Every Trader Should Know
- Finding and Fixing What Is Wrong
- What We Learned
