What will I learn about: protect your trading capital from hidden traps like exorbitant commissions and slippage by utilizing limit orders instead of market orders?

Learn how to protect your trading capital from hidden traps like exorbitant commissions and slippage by utilizing limit orders instead of market orders.

What will I learn about: why reacting emotionally to single trades is a sign of gambling, and how adopting a calculating, detached mindset prevents financial self-sabotage?

Discover why reacting emotionally to single trades is a sign of gambling, and how adopting a calculating, detached mindset prevents financial self-sabotage.

What will I learn about: the danger of the market's herd mentality and learn to avoid disastrous, impulse-driven trades by independently analyzing crowd behavior?

Understand the danger of the market's herd mentality and learn to avoid disastrous, impulse-driven trades by independently analyzing crowd behavior.

What will I learn about: the basics of bar charts by comparing morning opening prices with afternoon closing prices to decode the differing strategies of amateurs and professionals?

Master the basics of bar charts by comparing morning opening prices with afternoon closing prices to decode the differing strategies of amateurs and professionals.

What will I learn about: how to accurately gauge the market's intensity and the shifting power between optimistic bulls and pessimistic bears by reading the highs and lows on a stock chart?

Find out how to accurately gauge the market's intensity and the shifting power between optimistic bulls and pessimistic bears by reading the highs and lows on a stock chart.

The New Trading for a Living

Psychology, Discipline, Trading Tools and Systems, Risk Control, Trade Management

Dr. Alexander Elder

★ 4.1 / 5(204 ratings)

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Money & Investments

If You're Curious About These Questions...

You should listen to this audiobook

💡Did you know that the biggest obstacle to your trading success isn't the market itself, but a series of psychological traps hidden within your own mind?
💡What if you could master a specific 'Triple Screen' system to filter out market noise and identify the highest-probability trades?
💡Are you curious about the secret '2% rule' that professional traders use to protect their capital while most beginners lose everything?

Listen to The New Trading for a Living — Free Audiobook

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Key Takeaways from The New Trading for a Living

✓Learn how to protect your trading capital from hidden traps like exorbitant commissions and slippage by utilizing limit orders instead of market orders.
✓Discover why reacting emotionally to single trades is a sign of gambling, and how adopting a calculating, detached mindset prevents financial self-sabotage.
✓Understand the danger of the market's herd mentality and learn to avoid disastrous, impulse-driven trades by independently analyzing crowd behavior.
✓Master the basics of bar charts by comparing morning opening prices with afternoon closing prices to decode the differing strategies of amateurs and professionals.
✓Find out how to accurately gauge the market's intensity and the shifting power between optimistic bulls and pessimistic bears by reading the highs and lows on a stock chart.

Learning Tools

Reinforce what you learned from The New Trading for a Living

Mind Map

The New Trading for a Living

Avoiding Pitfalls+

Psychology & Mindset+

Chart Analysis+

Asset Selection+

Risk Management+

Record Keeping+

Getting Started+

Quiz — Test Your Understanding

Question 1 of 10

What is the primary advantage of using a limit order instead of a market order?

A. It guarantees you will receive the stock immediately.
B. It prevents you from paying more than your intended price for a stock.
C. It completely eliminates broker commissions.
D. It protects you from the emotional urges of gambling.

Question 2 of 10

According to the text, what is a sure sign that a trader is acting like a gambler rather than a professional?

A. They rely heavily on limit orders instead of market orders.
B. They meticulously track their personal equity curve in a journal.
C. They feel a personal connection to a stock and let single trades affect them emotionally.
D. They refuse to trade when the market is experiencing high volatility.

Question 3 of 10

How does the author characterize 'the market' from the perspective of a professional trader?

A. As a highly rational and predictable scientific body.
B. As an independent, self-regulating entity.
C. As a mass of people following trends driven by crowd psychology.
D. As an unpredictable casino where outcomes are entirely random.

Question 4 of 10

In a classical bar chart, what do the closing prices typically reflect?

A. The maximum power of the bears.
B. The opinions and actions of amateur traders.
C. The overall liquidity of the market.
D. The decisions of professional traders.

Question 5 of 10

What does a bar chart indicate when the distance between the high and the low is double the average size?

A. A sleepy market with low slippage.
B. An overheating market with intense conflict between bulls and bears.
C. A strong support level has been permanently established.
D. A market heavily dominated by amateur traders.

Question 6 of 10

How should a trader generally act regarding support and resistance levels?

A. Buy at resistance zones and sell at support zones.
B. Buy at support zones and sell at resistance zones.
C. Ignore them unless the market is experiencing high liquidity.
D. Wait for the price to break through resistance before initiating any trades.

Question 7 of 10

Why is it crucial for a beginner trader to focus on stocks with high liquidity and low volatility (low beta)?

A. It guarantees that the stock will eventually break through its resistance level.
B. High liquidity makes it easier to trade without high slippage, and low volatility limits potential losses.
C. Low volatility ensures the stock will perfectly match the movements of the S&P 500.
D. High liquidity eliminates the need to pay broker commissions.

Question 8 of 10

If a trader has $100,000 in trading capital, what is the maximum amount they should risk on a single trade according to the 2% rule?

A. $200
B. $1,000
C. $2,000
D. $6,000

Question 9 of 10

What action does the 6% rule require a trader to take?

A. Stop opening new trades for the rest of the month if monthly losses plus open risks reach 6% of capital.
B. Invest exactly 6% of their total capital into highly liquid stocks each month.
C. Ensure that their portfolio grows by a minimum of 6% before withdrawing any profits.
D. Limit their total broker commissions to no more than 6% of their annual trading budget.

Question 10 of 10

What is the primary purpose of monitoring your personal equity curve in a trade journal?

A. To predict exactly when a bear market will turn into a bull market.
B. To track the daily trading volume of your favorite stocks.
C. To calculate the exact amount of broker commissions you have paid over a year.
D. To determine if you are making or losing money long-term and evaluate your trading system.

The New Trading for a Living — Full Chapter Overview

1Recommendation
2A novice trader may stumble into numerous traps and wind up paying more than she desires.
3A skilled trader never gambles.
4When dealing with markets, always resist the urge to follow the crowd.
5Master bar chart fundamentals for more decisive market analysis.
6Grasping support and resistance is crucial for conducting effective, proper chart analysis.
7Watch liquidity and volatility, regardless of which instrument you choose to trade actively.
8Apply two simple rules to reduce your risk.
9Keep your trading disciplined with a detailed trade journal.

The New Trading for a Living Summary & Overview

The New Trading for a Living (2014) is your complete guide to getting started in trading. These blinks provide a detailed overview of a range of trading methods that will allow you to approach the market with minimum risk.

Who Should Listen to The New Trading for a Living?

Those interested in alternative investment opportunities
People studying finance or working in the financial sector
Anyone who wants to start trading and earn a living doing it

About the Author: Dr. Alexander Elder

Alexander Elder, M.D., was born in Russia and grew up in Estonia. He entered medical school at age 16 and, at 23, was granted political asylum in the United States. He worked as a psychiatrist in New York City, an experience that gave him unique insights into the psychology of trading. Today, he is a professional trader and trading teacher. His other trading books include Come Into My Trading Room and Sell & Sell Short.

[Alexander Elder: The New Trading for a Living] copyright [2014], John Wiley & Sons [Inc. or Ltd. as applicable] Used by permission of John Wiley & Sons [Inc. or Ltd. as applicable] and shall not be made available to any unauthorized third parties.

The New Trading for a Living

If You're Curious About These Questions...

Listen to The New Trading for a Living — Free Audiobook

Key Takeaways from The New Trading for a Living

Learning Tools

Mind Map

Quiz — Test Your Understanding

The New Trading for a Living — Full Chapter Overview

The New Trading for a Living Summary & Overview

Who Should Listen to The New Trading for a Living?

About the Author: Dr. Alexander Elder

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