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