Trading for a living

-Presentation-

The book is truly a bestseller in the field. It was published in 1993.

In a word, I could mention that the psychology of the investor and self-control/discipline play a
role of the determinant. In 'Trading for a Living', he clearly mentions Freud's opinion regarding this.
subject: "betting has the same effects on the brain as masturbation" or in other words "the level of
"Dopamine secreted by the brain is directly proportional to the evolution of the stock account."

Similarly, we can say that the best book I have ever read related to markets in general, but in
Special for forex, this book remains particularly the first part of Elder's book.
(the first two chapters).

It is true that the author begins to speak about his system with three screens, but let us not have
the impression that this is an infallible system.

So I will stop at the first part of his book which is brilliant and deserves to be read by everyone.
trader. Why? Because it represents the essence of trading at both the individual level and at the level
general, psychology of investors.

Only those who have actually gone through something like this can understand. Until you reach the bottom limits of

Without spiritual visions during trading, you will not understand how the market works.

The book is truly excellent and clearly written. The most valid point for me was in
explain the motivation behind technical analysis, which is a better understanding of psychology and
the sentiment of the marketț ei.

The idea is that the market is a real-time discussion about how much the assets of companies are worth.
and so there are a lot of group psychologies involved. At the same time, there are many indicators
techniques that show different ways of presenting data about preț ș the volumes can indicate to us the way
of market thinking. For a person who uses fundamental analysis as the basis, reading this
a cart is like a strong friend.

But it is very interesting to see different trading styles and how each one
really try to tackle similar issues, just using different tools.

Anyway, Elder describes in his book the charts/candlesticks, providing a complete list of indicators.
techniques (trend-following, oscillators and various) and describes its own trading system.

After you read this book, you will find that you have just taken a great step forward compared to the crowd.
amateurs. The elder believes that success in trading is based on the three M's: mind, method, and
money. First of all, you will see what the key to winning is, namely within
your mind. You will learn how to develop discipline and how to avoid trading traps
emotional.

Secondly, you will learn how to find good strategies using charts and indicators.
computerization and other tools. You will discover how to combine multiple analytical methods
in a powerful trading system.

In the end, you will learn how to manage the money in your trading account. Rules for
Risk limitation is vital for a trader like a safety net.

With this book, you will find after reading that you are on your way to mastering a new way of
trading of stocks, futures, currenciesș I opț June.

TABLE OF CONTENTS
The book contains 8 chapters listed below:

Individual psychology.
Mass psychology
3. Classic analysis of charts (charts, support and resistance, trend, trend lines, gap, formations)
graphics)
4. Computerized technical analysis (the computer in transactions, moving averages, MACD, the System
directional, momentum, ROC, Wiliam %R, Statistic, RSI.
5. The neglected essential (volume, time, open interest, Herrick Payoff Index)
6. Stock market indicators (New highs and lows, trader index)
7. Psychological indicators (consensus indicators, loyalty indicators)
8. New indicators (elder and strength index)
9. Trading system (three-images trading system, the trading system
channel
10. Risk control (emotions and probabilities, money management, exiting the business).

Well, I chose the first two chapters.

CHAPTER I – Individual Psychology

This contains 8 components presented further in the next lesson.

CHAPTER II – The Psychology of Crowds

The chapter contains 6 parts presented in lesson II.

This chapter includes the following 8 main parts:

1. Why do we transact?
2. Fantasy vs reality
3. Market Guru
4. Self-destruction
5. The psychology of trading
6. Trading lessons from AA
7. Anonymous Piercers
Winners and losers

WHY DO WE TRANSACT?
People trade for various reasons, some rational and others irrational. For
for everyone, however, money represents freedom even if some do not know what to do with it.
Paradoxically, the goal of a good trader is not to make money but to trade as well as possible.
because money comes by itself after that. The problem of the person pursuing self-fulfillment is that
this one also has the gift of self-destruction.

To the same extent that the stock market provides plenty of opportunities to win, it also offers
the traps of losing money. So act according to how your internal conflicts act.
it means something quite expensive because these people want to fulfill these
"wants/frustrations" in the market.

FANTASY vs REALITY
One of the fields where man expresses his own fantasies is the stock market. Conversely, a trader of
Success is a realist. He knows his abilities, but also his limits. He observes what is happening in the markets.
if you know how to react to them. So a professional trader observes their own reactions and
make realistic plans that cannot rely on illusions.

Those who lose buy, sell, or do not trade thanks to their fantastic ideas. They
transact as if dodging ghosts on a childhood night because the capital market
offers a less ordinary and fantasy-filled environment.

These fantasies of losing traders stem more from childhood and distance them from
to see reality as it is. Sometimes it seems to them less friendly, even a
distorts, which causes them to stay away from success.

The measure of the brain/intelligence.

Those who lose suffer from the 'brain myth' and will tell you that 'they lost because they didn't
known the secrets of trading." They have the fantasy that successful traders have some knowledge
secrets. Therefore, they will seek certain software or books that contain these "secrets" and, of course, will
I don't understand why charlatans sell them such things.

Successful multi traders do not have intellectual training and yet they win. Those who lose have
the fantasy that trading is an activity for intellectuals, but the truth is that trading does not have
connection with exact science.
What separates winners from those who lose is not intelligence, not secrets, and certainly not
intellectual education.

What is subcapitalization?
Just as many losers believe that to win you need a large sum of money. Very many.
I give up the game after a few series of losses or a bigger loss. Usually after such a
market loss turns in the direction chosen by the trader, but it is already too late for the one in question.
From here comes the fantasy of 'if I had a larger sum I could have stayed in the market and I would have'

punished

But as usually happens, even if they increase their invested amount, they will lose even more.
It's as if the market is trying to LAUGH at them.

So a loser is not undercapitalized but his mind is not sufficiently developed. He can
destroys a large capital just as quickly as a small one. They will engage in excessive trading.
(overtrading) if money control is nonexistent.

It will not matter how good the trading system is because they will still lose. Many
they ask how much money to start trading, but at the same time they expect to lose a lot
sum of money.

So, whoever wants to win will have to control their losses first by accepting them.
a reduced risk from the whole capital for each transaction

This is actually a way to control your money and learn the big mistakes with a smaller capital.
invests.

Mitul autopilotului
Traders who use a computerized system believe that it will ensure them gains in a way
they are like medieval inhabitants who turned to alchemists to transform any metal
they will spend hundreds and thousands of dollars on an automated trading system and
He will always believe that a computer code will turn into a money-making factory.
It's like believing that complex human activities can be automated. Machines can help.
but they will not replace human judgment. Regarding these automated systems, only one question arises
… 'if these are so good and bring you so much money, then why are they selling them?'
final is just another industry that sells you a certain product that has its limits, like all others
the products.

We must be aware that what was valid on the markets today may no longer be tomorrow. This
the system can be interpreted as an autopilot that operates only according to certain working parameters, and
if turbulence occurs in the system, it no longer knows how to react. The first event
unexpectedly can destroy the user's capital.

Ultimately, no matter how perfected such an automatic system might be, it can only function on
the basis of human judgment. The market is not your 'mother' to protect you and even feed you daily in the same way.

It can have various reactions, less anticipated.

The cult of personality

Many people casually follow their desires for friendship and freedom. However, when they are under
pressure they try to find a strong leader. Traders will always seek their direction
after a suitable guru for the situation.

The transaction with open eyes

Every winner needs three essential components to invest:
an understanding of individual psychology
2. a logical investment system
3. a money control plan.

All three must work together. If one is not applied, then the whole system fails.
Those who lose focus on one or at most two. Usually, their attention is based on
the most on the trading system.

So transactions must be based on clearly defined rules. You will need to analyze your
feelings during transactions, to be sure that decisions are logical. You will need to structure yourself
controlling money so that no loss of any kind can take you out of the market.
FLEA MARKETS
This concept has accompanied capital markets since their inception.
Human nature changes slowly and today the new rage among the masses includes the rage for GURU.

Nowadays, these market gurus spin faster than they did a few centuries ago. Even though
they are educated and intelligent investors who follow GURU like a false Messiah.

In financial markets, there are three types of GURU:

master of the market circle
2. guru of magical methods
3. teachers who are no longer alive.

An example of a guru who is no longer alive is W.D. Gann, who has been talked about in the past.
he speaks in the present and will definitely be spoken about in the future. He is a legend appreciated by all traders.

lumii. His books 'Gann courses' and 'Gann software' are still sold even after his death
since 1950.

Another GURU who is no longer alive, but who is somewhat closer to our times is
R.N. Elliott, whose theory 'Elliott waves' is successfully applied by many traders around the world.
of times since the 1930s.

GURU of the market cycles

Just like for many decades, the American market, one of the most developed in the world, has had
cycles of 4-5 years. For illustration, we will only list the bear market lows from the years
1962, 1966, 1970, 1974, 1978, and 1982 (I would also add those from 2002 and 2009).

Typically, strong stock markets consist of 2.5-3 years of growth (bull markets) and 1-1.5 years of decline.
bear market declines.

The history of the American stock market highlights both bull markets and the existence of a guru, and from here

the name of the guru of the stock market cycle.

They carry out their existence during a cycle, more on growth and then, in the phase of
downtrend occurs along with the respective cycle. On this occasion, their 'prophecies' are followed and
followed by many traders acting either buy or sell as they make predictions about
market.

The success of such a guru depends more than on short-term luck. They rely on
on a specific theory studied a few years ago and which, once promoted in the market, even if initially
it does not inspire confidence among traders, it gains importance as long as it is valid
promoted by the respective guru.

After a few years, that theory and thus the supporting guru succeed in front of the market. Generally
they come from the ranks of established market analysts and less from those
institutional, as they use almost the same methods.

They publish their theory and sell it, becoming an outsider with a unique theory. When their theory
is no longer supported by market trends (usually after a cycle of 4-5 years) traders begin to
focus attention on other market gurus.

A guru of this category was Edson Gould, who based his theory on changing politics.
FED regarding the interest rate. Its basic rule was that if 'FED would raise the rate 3 times in a row
the reference point will then be a BEAR market. The opposite was if the FED cuts three times in a row
the interest rate will then be a bull market. His activity was full during the period 1973-1974, especially
in December 1974 when the Dow index fell to a low of 500 points and his theory was applied with
success.

He introduced a new method for AT charts - speedlines, which marked

the market reaction especially to a rebound. The introduction of measures to stop liquidity in the markets
Due to the rise in inflation, Gould's theory is no longer feasible.

The guru of market cycles is Robert Prechter, who has applied the Elliott Wave theory since the year.
1980, in October 1987 when the Dow dropped again to 500 points, his theory failed.
attracting blame from traders.
The fact that these gurus did not last more than one cycle is due to the supporting audience. That's it.
As long as the theory is being tested, the public is attentive; if it makes a major mistake once, it is blamed.
it can no longer rise to the same level.

Usually, the 'crash' of a guru happens when they are in full glory, at the peak of it.
this is a signal for that market.

It's interesting that a guru is no longer in the "books"; it is the Barron's show from January of.
every year that makes the new year forecast. Well, this show will not call him so that he does not
It damages the reputation if his theory no longer works. An old guru will no longer be called to Barron's.

The guru's magical methods

These are specific to futures markets compared to those of cycles which are of the market.
spot.

He discovers a new method and uses it to gain an advantage over other traders by looking for a new one.
opportunity.

Self-destruction
The transaction is a difficult thing. Anyone who wants to be successful for a longer time must treat
seriously this is a problem. Unfortunately, investing in the stock market attracts many people who are trying their hand at it.

the hazard, impulsive people who believe that the stock market is their world.

If you trade only for 'thrills' then you can be sure that you have to accept certain
risks and that's why you won't last long on the stock market. Unfortunately, the stock market is more emotional and

this will lead to losses.

The game of chance

Many people have gambled at least once in their lives. That is why Freud says that
gambling (the game of chance) is so universal because it can be a substitute for
masturbators.

The categories of gamblers were divided by an American psychoanalysis professor - Dr. Ralph
Greenson - in three parts:
the normal ones who try their luck for various reasons but know when to stop;
professional gamblers whose lives are characterized by such things;
those who are guided by such things (neurotics) and who cannot stop doing so. They feel
happy or wish to test their luck.

Gamblers feel lucky when things go their way and feel terribly bad when they lose.
The advice for those who are in this last situation, especially after several losses, is to
interrupt transactions for at least 1 month, during which they must reassess their attitude towards
this activity. If the person in question cannot resist staying 1 month away from the stock market then
the measures must be more drastic.

Self-sabotage
The peak is that many people do not succeed in life or in an attempt at life not because of
the incompetence and because they want to fail. Odd, but that's how it is.
happen. Those who constantly blame themselves for their failures, but especially for those of those around them,

they end up sabotaging their own work.

Do you think that those who do such a thing recognize their guilt? In no case will they blame anything else more.

Putin's own actions of mental sabotage. In fact, instead of acting like adults, we will try
Just impulsive childish actions. Now we can understand why the feminine gender is more successful.
in such situations because they have a specific maturity, a greater determination.

How can we solve this mental problem? Let's realize the mistake, let's keep a journal.
daily to record the incoming/outgoing movements and to look more often at the graphic formations,
that helps us to win but also to lose.

On the other hand, the stock market is a continuous war, but also a fight to defend yourself from the blows of others.

partners who want you to lose because that way they will win. You protect yourself by hitting/attacking the
the one next to you, sometimes without mercy so that the success may be greater. The more some lose
the greater your chances of success are. Someone wins while someone else loses, this is the stock market.
it's not a game of chance.

Self-destruction control
Regardless of whether they are 20 or 60 years old, people make the same mistakes throughout their lives. There are few who

how they manage to overcome the problems that hold them back or make them make mistakes so often.

Some recommend therapy with a specialist in the field. One is therapy due to the conditions of a place.
one is in the work field and the other is in the stock market.

TRANSACTIONAL PSYCHOLOGY
If your account has some gains, it may suffer if you are or become arrogant in the market or you will
exaggerates regarding your merits. Often the market helps you but you have the impression that the movement is
it is only due to your skill.

So if you let emotions interfere with the market, then the battle may be over. Many
traders who have a good trading system lose because they let psychology make decisions and
this rule is incorrectly adapted to the situation.

Those who win at the beginning by following certain rules later consider themselves geniuses and end up giving to a

part of these well-established self-impositions seeking their own rules believing themselves unbeatable. From

These reasons start to fail as they are not prepared for the market and losses will accumulate.
losing and the fog of winnings.

From here we observe the many pieces of advice that traders receive from books, going as far as isolation.
(only you and the market) excluding information from the media. You will find that some advice is
some others are contradictory and you will wonder what is the best thing to do.

Otherwise, you will find yourself looking for methods to prepare psychologically to resist the temptations of the market.

using self-control.

9. ANONYMOUS PIERZATORS
They are the piercer or great piercers or those accustomed to this way because they still hope that they will come across

the big win. They do not try to change their trading style because they have gotten used to it and
I live on illusions, fantastic things.

Many of them feel pleasure when trading or do not realize that there is a line between doing
serious transactions with RISK and gambling. They are on this edge without knowing that such a thing exists.
As a rule, they do not speak of their losses and even after they exit the market, they try to teach others.
others how to trade losing again, but this time with other people's money.

They will look for a new software like Holy Grail or a new guru and will not know why they have lost.

They will realize that they are losers and will say so, that they cannot get out of this state.
Only those who will change their life as a trader and think like a winner will.
punish. Such a trader will accept that the market has its risks but will not accept a loss
more of a major risk for its capital.

A trader will only accept those risks that do not endanger their investment capital.

There is also a way to try to get rid of this loser mentality, namely that in
every morning before we start trading we will say .."I am a loser and
my actions have led to significant losses of my capital.

WINNERS AND LOSERS

Traders operating in the market come from different backgrounds and social categories and have different attitudes.

facing risks, gains and losses. Some of them rely only on their personal skills and less on themselves.
they parse the specific emotional motivation of the temperament or.

We can compare the stock/capital market to an ocean. When you are heading in the right direction of the stock exchange
you feel like you are on a roll and the emotions are strongly positive. On the other hand, when your direction is in the opposite sense

It is like being against the tide of the sea and it becomes dangerous.

All these feelings exist only within it, and the market does not know of your existence, so
you cannot influence it, instead you can change your behavior.

An ocean can stir panic if this is in your mind. It is true that sometimes I am
storms, and if you are not prepared for them, you risk drowning. An ocean is useful when
You fish in it. If you don't know how to behave in the market, first you learn and then you throw yourself into it.

prepared to control their risks.

Here are some rules that will help you become an experienced trader instead of a simple one:
1. Decide that you will be a long-term trader and that you will stay in the market for at least 20 years from now.
before.
Learn as much as possible. Listen to the experts, but keep a dose of skepticism about everything.
work. Ask the experts but do not believe them entirely.
3. Don't rush to trade. Learn to feel the market, it will always be there with other opportunities.
I am big.
4. Develop a method for market analysis. If A happens then B will be fulfilled. Test more.
first with the historical data of the market and then with real money in the market.

5. Develop a plan for money control: long-term survival; growth

periodic capital; obtaining a profit and maximizing it.
6. Keep in mind that the trader is the weak link of an investment system.
Winners think, feel, and act differently than those who lose. To be a winner
you need to change your attitude, personality to become something like that. If you have lost many
If you don't want to accept the idea that everything is due to your old beliefs, then it doesn't matter anymore.
You're wasting your time and should give up on the scholarship.