Come Into My Trading Room: A Complete Guide to Trading

I owe a great deal to Dr. Elder's and his book Trading for a Living, though I was quite successful before I finally bought his book, it added another dimension, and gave me more sound understanding in what I was doing. Trading For A Living is a book I highly reccommend for anyone who's thinking about trying to enter the world of trading. This book is just as equally superb, with more depth into the technicals, that are definitely going to be useful for Futures traders. I'm 22 years old, and I truly respect the works that Dr. Elder's has put together, but I'm an options trader... let me refine that even more, I strictly buy calls and puts, I don't write calls at all, I'm not a professional, don't want to be. I did a few times and made a good amount of money, but didn't like the risk. I find his writing on options, even though it makes up only a few pages, is full of horrible misconceptions, and is completely divorced from the way an options trader thinks. Given the man is a futures trader, and almost gives nothing but praise for futures, while giving the most gloomiest views of stocks and options, and futures are time laden and levergaged product with nearly unlimited risk, I'd think he'd see the value in options instead of referring to them as lottery tickets, or as sucker bets. However, I don't want this to become all of my review, I feel it is something that has to be mentioned before the rest of the book can be talked about. Options are not only a reliable form of trading, they are a legitimate form for someone like myself who swing trades and never holds a position longer than six weeks.On Options:I'm just going to be very clear. He's right about all the mistakes amateurs make, I'm not denying that if someone enters the market with the gambler mentality, they're not going to lose everything, but that's the same thing in any market. It's all about money management, as it is for futures or stocks, I've traded both and doubled my money in stocks, before I found options. I trade options, not because I can't afford the other stuff, or because I'm looking to get rich quick--I want to make a career out of this--but because options fit into how I percieve the act of buying and selling, they fit my personality, and my attitude to the market (that of swing trading. I've barely ever held a position longer than 6 weeks). How much are you willing to lose, is the first real question anyone trading anything should ask themselves. I made a fortune by using the massive leverage of options, with never risking more than the money I would've lost had the stocks turned against me had I bought the stock (i.e, if I had a 5,000 dollar account and XYZ is breaking out of a bullish pennant at 18.50, and the 19.50 options are .50 cents, if I was going to buy 150 shares of the stock with my capital and set a stop loss at 17.00, I was willing to risk 225 dollars. I could buy 4 19.50 options for 200 dollars plus commissions, representing 400 shares of stock. The bet would be that the stock would rise a dollar in three weeks, my total risk, 205 dollars. If the stock goes up 20%, I would make more or less, 400% on my money. Worst case, it falls and I lose my two hundred. Average case, it does nothing, and I close out a week later with a 20 to 50% loss of capital. When you do options like that, and are a swing trader, like I am, options are not only safer--protecting me against gap downs--they are downright excellent at creating wealth). You risk more than one hundred percent of your investment when you buy futures, in fact you can actually lose more than you have in your account. If you're in full margin in a stock, and something happens, a scandal is revealed, the company goes bankrupt, you'd owe them the other half. In options, the underlying asset could go to zero, and you've lost only what you invested--that's what they mean by limited risk. But like Futures, like stocks on margin, you can cut your losses in options. That's right. As long as there's a bid, you can sell it. That means you can limit how much you are willing to lose. What a novel idea!!! It's not like money management is part of Elder's system... oh wait, it's the hallmark of the man's system. One of my best friends works in a hedge fund in Boston and trades options and stocks--he doesn't write options, he trades them. My biggest trade this year right now, is Priceline, I had 20 contracts, front month August, at 230, they cost me a little less than 8,000 dollars, I sold them for a little under 70,000 dollars, literally five days after I bought them. 20 contracts represented 2,000 shares of a stock trading at 228, which would've cost me 456,000 dollars. 8,000 dollars at that time represented less than 5 percent of my account (I will admit that I had no idea it was going to move like that, and was pleasantly surprised). I could've bought the stock using full margin, and fifty percent of my account, but why should I, since I was sure if a move was going to happen, it would in a couple a few days to a week or two, and I'd have till August 20th, and it was still July, if it didn't, I was pretty sure it was going to drop, and I didn't know how fast it was going to drop. If I did not respect Dr. Elders, that small 2 and a half pages would've turned me off his book completely. I want to make it clear. Dr. Elders is a brilliant man when it comes to Futures and technical analysis and the psychology of the market. But he should leave trading instruments alone.To his statement that no one he knows has built their capital with options, maybe that's true, I don't know who he knows. But the young men who formed Cornwall Capital turned 110,000 dollars into 30 million buying options before using credit default swaps to turn 30 million into 120 million. Victor Sperandeo, a professional trader, who traded options, and claims that 40% of all his market winnings came from options, and that he got started by trading options. Jim Cramer used options for the trade that paid for his entire education as he explains in his book, in fact, reading Confessions of a Stree Addict, it's clear he's used options a lot. Mark Weinstein started his fortune trading futures, got hit bad, went to trading options, turned 100,000 into 900,000 in three months, according to market wizards. Michael Parnese started off trading options in the wild bull market, where he turned 30,000 into 7 million. Marty Schwartz started off as an options trader, before he went to stock index futures, he truly built his fortune trading options, starting with 10,000 on the AMEX. I think when you state a matter of opinion, with limited knowledge, and few facts, you fail. He gives an example of stupid options trader, who let's his contracts expire worthless. Except for the times that I'm up over 300%, have gotten my money back, plus a profit, scaling out of the trade, I've never gone into the last week of trading, in fact, I'm usually out a month before the options expire, if not at least one week before (if they're front month options), every options trader I know does the same thing.Now to the rest of his book. Like he does in Trading for A Living, he goes through many forms of technical analysis, I feel this one was more in depth, and tailored to experience, though an amateur can certainly get some good ideas from it. He details lays out a great plan that coupled with Dr. Van K. Tharp's books Super Trader and Trade Your Way To Financial Freedom, I believe will get any person on the right track mentally to prepare to trade the markets. In the end, it really all is about controlling your emotion, controlling your money (taking care of losses and letting winners take care of themselves, no one's ever gotten in trouble cutting a winner short, plenty of would be millionaire's living on the street because they didn't cut their losses). This book is basically a psychological guide to prepare you, and it's a necessary one.I still prefer Trading for A Living, but have no regrets with this book at all, and reccommend it to anyone that ask me about the stock market.

I have reviewed this book before, since then I have purchased the Metastock add on software that relies heavily on this book and his previous books , now I give it a 5 star. I think the book in combination with his software is the best complete trading education with 2 trading plans. I like his definition of risk control and placement of stops and emphasis on trading discipline,that one can even build on by adding additional oscillators.

I work with several colleagues of mine in late 30's and early 40's studying their MBA. They spend quiet a bit of money, time and family time ( cases where kid's tv addiction linked to parents doing their MBA). Few of them managed to get promotion,some had their titles changed, some moved to different companies doing similar jobs etc. I asked some of them what was their objective of studying MBA at this age. Most have a vague objective,but as Dr.Elder quotes "A caged animal trying to grab it's tail"!. All of them have invariably tried their hand in stock market, got burnt and move back to the comfort of 'cubicle jungles'.Had they spend the $20,000 or $30,000 they spend on MBA with proper training on trading, losses, trial and error in stock market, software many would have come far ahead in trading and 'self reliance' and 'early retirement' . Instead they fear the corporate layoffs and meaningless promotions that involve travel and less family time and divorce and rebellious kids. I have started the trading career like most others and lost money and thankfully got access to Dr.Alexander Elder's materials before a wipe off!So now, we have a better way of self graduating to "MBA of trading' where you can be self reliant and retire by simply digesting Elder's books, his suggested reading materials, software ( ex : Metastock , tradestation), bite the painful bullet of losses, enjoy the pleasure of successful trade and slowly evolve to a mature trader. If you are a working professional, you will spend as much ( or more) time as a regular MBA Course, but at least if you happen to be a person fit for becoming an "MBA In Trading", you will be far better off than a MBA in a corporate culdesac.Here is the suggested order to graduate yourself to an "MBA in Trading".1.  Trading for a Living: Psychology, Trading Tactics, Money Management  ( You will need to read it twice)2. Start making journals and learn from your on trading experiences3.  Come Into My Trading Room: A Complete Guide to Trading  (Masterpiece...Read 4 or 5 times to absorb the spirit and content of the book.)4.  Entries & Exits: Visits to 16 Trading Rooms (Wiley Trading)  (Read couple of times)5.  Sell and Sell Short (Wiley Trading)  (Read couple of times)6. Read the books mentioned by other full time traders in "entries and exits" ( ex:  Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude )7. Understand Metastock, Tradestation, esignal type tools.8. Attend his seminar if you can afford it.Think about all the time ,money and effort you are going to put into it, it will be similar to the money spent on an MBA...and your title might be "Work from home CEO" with your job description like Self reliant full time trader who looks forward to Monday Mornings and for whom work is an everyday vacation and will work during a vacation also. He is available when kids need himReviewing his book in solitude will not serve the reader since it is a sequence of learning material in a tough world and should be treated as such.I would call  Come Into My Trading Room: A Complete Guide to Trading as his masterpiece,but  Trading for a Living: Psychology, Trading Tactics, Money Management  is highly recommended because of the sections like all technical indicators explained. Some tools might be tailor made for you. In  Come Into My Trading Room: A Complete Guide to Trading , the book has narrowed down to exact trading tools Elder uses which is great,but for a newbie , it is better to read the entire menu ( Trading for living) and then chose your dinner ( Come Into My trading room). In trading parlance, The above two books will have to be your "core" positions . Entries & Exits: Visits to 16 Trading Rooms (Wiley Trading)  And  Sell and Sell Short (Wiley Trading)  are the perfect desserts.E and E is a classic which walks through some sample trades and also a glimpse of tools those users use. All of the traders are trading for living, some with less than 250k equity . Elder looks at their trade and see how simple he makes his trading decision . Sell and Selling short is more like an addendum to his previous books with focus on exit strategies.I know there are plenty of readers who read financial (and wealth making) books for entertainment. If you are one of them ( The way to check is if you read financial books constantly AND do trading BUT do not have proper records), still this book will fit your case. Choice of words all along the book and subtle comedy makes it an equally interesting read.EXAMPLES of some punch lines (not verbatim):> A person who pees against the wind has no right to complain of laundry bills> Newbies swarm to options to get more bang for their bucks,but it is usually their head that gets banged.> What beginners call gut feel is usually an urge to gamble, and i tell them they have no right to a gut feel.> If you pay high above EMA, you will find a greater fool who will pay even more> Traders dream of profits but often freeze like deer in the headlight when a loss hits themWhichever book you read in whatever order, make sure to read it, read again and read again .. tread carefully on stockmarket.You might win and in small and subtle ways it is happening to me!

Five stars

The amount of material that this book covers makes it a must read for every trader out there. Cannot recommend enough!

Muito didático e traz conceitos bem sólidos de análise técnica. Ótimo tanto para aqueles que estão começando, quanto para traders experientes.

One of the must read books

A Master piece.A must read for traders