In Trend Trading for a Living, the trading coach and hedge fund manager known on Wall Street as “Dr. Stoxx” shares his personal strategies for analyzing markets, picking stocks, and knowing when to buy and sell.
LET’S talk about your interest in the ﬁnancial markets.We’ll start with the hardest truth of all: it’s difﬁcult to turn proﬁts and earn a living through the trading game. After all, no one but the mint is printing money, nor does it grow on trees.
So here’s the bottom line for anyone wanting to trade stocks, currencies, or futures. You’ll either earn your suc-cess through hard work or lose your stake and move on.
Trading has a mathematical advantage over investing, and good traders will make more money over less time than good investors. But the devil is in the details. It’s the trader’s job to capture volatile price swings that ﬂatten out over the holding period of a buy-and-hold investor. As a result, they need to master the challenging skill of time management.
Take this pursuit seriously, and ﬁnd a strategy that capitalizes on market movement. Indeed, your success or failure depends on the path you choose. The most danger-ous road chases proﬁts without an understanding of down-side risk. The safest course builds skills one step at a time and acts defensively when things go wrong.
Fortunately, you’ve found your way to Thomas Carr’s excellent book on trend trading. This informative text opens the market vault to new and experienced traders, welcoming them into our discipline with open arms. Indeed, you’ll ﬁnd everything you need to get started on the road to trading proﬁts in these enlightening pages.
But don’t stop your education there. Developing supe-rior trading skills is a lifetime pursuit, in which we’re con-stantly on the hunt for new ideas, methods, and strategies. This active learning process keeps our game fresh in a predatory market world that takes no prisoners.
Make sure your trading matches your lifestyle. You can lose a lot of money when your reach exceeds your grasp. Don’t trade every tick if you can’t follow the market in real time. Don’t day-trade your investments or buy and hold your trades. Never use the market as your therapy for personal problems. It makes a terrible cellmate.
Watch the clock, and become a survivor. Develop a sense of how stocks react to different cycles. Learn the unique traits of the market day, week, and month. These repetitive tendencies affect how prices move and how traders trade. And they reveal telling quirks that produce high-probability trades.
PART ONE : Preliminaries
- What You Need to Get Started
- Becoming a Chart Reader
- Developing a Trader’s Mind
- The 10 Habits of Highly Successful Traders
PART TWO : Trend-Trading Basics
- What Is Trend Trading?
- Setting Up Your Watch Lists
- Determining General Market Direction
- Put Your Market-Reading Skills to the Test
PART THREE : Get Started in Trend Trading
- Selecting Bullish Stocks to Trend-Trade
- Selecting Bearish Stocks to Trend-Trade
- Entries and Exits
PART FOUR : Trend Trading with Options
- Options Basics
- Options Strategies: Bullish Trends
- Options Strategies: Bearish Trends
- Options Strategies: Neutral
PART FIVE : Trading for a Living
- The Bigger Vision: Where Trend Trading Can Take You