World Famous Comics: Sell and Sell Short (Wiley Trading)
Sell and Sell Short (Wiley Trading)
By: Alexander Elder Publisher: Wiley Average Rating: Binding: Hardcover Label: Wiley Number of Items: 1 Number of Pages: 250 Publication Date: May 05, 2008
Product Description: In Sell and Sell Short, Dr. Alexander Elder examines one of the most overlooked aspects of trading and reveals how you can protect and profit from your trades by exiting them the right way. Throughout the book, he explains how to set profit targets and stop-loss orders prior to entering any trade. He also shares real-world examples that show how to manage your position by adjusting your exit points as a trade unfolds. Along the way, Elder also addresses short selling.
Practical discussion of common trading issues Sell & Sell Short addresses most of the questions which beginners ask about selling stocks. If you have reached the point where you understand that the selling decision is critical to the process of making successful forays into the market, this book is for you. I found this book to be fascinating. I could not put it down.
It has been written in three parts:
Part One Dr Elder first brings the reader up to speed on how to buy, manage risk and keep records. While the buying method summary and the risk management to a large extent summarise and refer to his previous works (Trading for a Living, Come into my Trading Room and Entries & Exits), the discussion about keeping records provides important new insights. Indeed Dr Elder makes the strong claim, which I would echo from my own experience, that the best traders will be those who keep good records. The reverse also applies. Poor traders tend to have no records. This is because investing is not simply a matter of acting in the market and making money. It is voyage from ignorance to mastery. They key to this voyage is that you know where you want to go, how you intend to go there and learn from every attempt, so improving your skills.
Part Two Here Dr Elder takes us into deep into the question of how to sell. He has divided this part of the book into three chapters, dealing with each of the three types of selling.
The first chapter deals with selling at a target. He shows how he does this with a moving average, envelopes or channels, and resistance levels. Dr Elder does a marvellous job here, explaining the logic of his trading plan and how the various selling points derive from that logic. This is no academic exercise. Here, and throughout the book, he shows actual trades, often showing what he learned from the ones that went well and the ones which did not work out.
The second chapter deals with selling on a stop. This is one of the best chapters in the book, particularly because it is one of the questions which beginners ask me most often. Dr Elder's discussion explores every aspect of setting stops from a very practical point of view and with many examples. I would have paid the price of the book for this chapter alone.
The third chapter deals with selling on what Dr Elder calls "engine noise". This addresses a very common issue that neophyte traders agonise over: wait till the stop is hit, or bail out early. This chapter includes some anecdotes on how the market can ring a bell near the top and introduces the idea of a decision tree for selling, not as a theoretical idea, but what it means in practice, based on Dr Elder's own experience working on his own trading decision tree over many years.
Part Three This year, we are living through a bear market. One way traders can profit in a bear market is by short selling. This involves a basic idea of trading: trade with the trend, which is down. Short selling is an easy concept to grasp. You borrow some shares, sell them and later buy them back at a lower price, before returning the borrowed shares. There are some complications in this, compared to going long, which are discussed from a practical perspective based on Dr Elder's extensive personal experience with short selling.
While short selling was recently banned for a while in at least some stocks in several countries, it is an important part of the trader's skill set. In this respect Sell & Sell Short has been published at the perfect time. I am asked all the time about short selling. Dr Elder has written for me an answer to those questions, to which I will point traders for years to come.
Short selling is a skill which may be employed in falling markets. However, even in upward trends, there are counter trend moves which are exploitable using Dr Elder's methods. He shows examples in the stock market and also discusses the particular characteristics of shorting futures, option and forex.
Conclusion This book is beautifully printed in colour on glossy paper. This is necessary to fully explain the methods and bring the charts to life in an easily understood way. It also explains why it is not the cheapest book in the bookstore. This reminds me of the trader who years ago asked me for a good book on trading. When I suggested he buy and read Trading for a Living (Dr Elder's first book), the trader admonished me for suggesting a book which then sold for about $100.00 Australian. I asked him how he was faring in the market that year, to which he told me he was down $15,000 to date. I was impertinent enough to suggest that $15,000 was a high price for tuition, compared to what was available for only $100. He walked away. However, this story focuses on a philosophy that pays great dividends. I have read several hundred books on the markets. From almost every one, I learned at least one thing which was worth far more than the price of the book. Sell & Sell Short is no exception.
Why so many five star reviews? Did I miss something? I really had high hopes for this book, but I just can't recommend it. It strays too far off track and spends very little time focused on what I believed it would, selling and selling short. Although there are several useful bits of information provided in this book, none of them were original nor very insightful beyond what you would get in any beginners guide to trading. Sorry to say, but this is the only product that I have returned to Amazon...
Should you buy this book or not? $53.55 plus shipping. So is this book worth the price? I will hopefully be able to give you an objective answer through this review. I would like to preface this review by saying that I have not read Elder's "Come Into my Trading Room" for a couple years (so my memory might be sketchy). I remember reading it at the time and coming away with a profound respect for Elder and how well he outlined the steps to becoming a professional trader.
This book is a bit of a paradox to me. On one hand, it is a very good representation of what it takes to become a great trader. If you follow the things Elder says, and have the discipline to stick to them, then it is improbable that you will not eventually become a successful trader.
With those things said, I felt that this book was much lighter in some ways then his most famous book. "Trading Room" is a tough act to follow as one reviewer on here said. That book has everything you need, and a lot more in depth knowledge then "Sell and Sell Short" offers. While reading this book, I was constantly a bit disappointed at how much it was angled towards the beginner. That's fine if that is what the book is aimed for, but with this price tag, I felt that it was a bit of a contradiction.
If you are going to price your book at an 80$ tag price, it should have some very in depth, and advanced materials. I know some of the expensive books I have purchased are the kind that you can keep coming back to over and over again to gain new insight into what the author was communicating (Mark Douglas comes to mind, not to mention Elder's previous bestseller). So while I thought this material was all relevant, I felt a bit like I was reading a high priced update to "Trading Room."
To show a bit of what I am talking about, let's take the example of keeping records. Elder goes to great lengths to convince his reader that keeping good records is the most important part of being a good trader. I happen to agree with him, but I was disappointed that he did not elaborate more on WHY it is so good.
I understand that it lets you correct past mistakes, but he did not really go farther then that. Good records are important because it keeps you focused in the NOW. If you take good records, it makes you focus on how you did on each trade. Most people who are new to the markets tend to focus immediately on the P/L of their account; they think its all about making money.
They should be focusing on how well they perform on each trade, the level of emotion they are letting make their decisions for them, how losses feel, etc. If you focus on the money and whether you're winning or not, you are not focused on a long term winning attitude that will make you a professional trader in the long run. A professional knows that any trade is pretty much a toss up; there are too many unknown variables that can take you out of a trade. If you beat yourself up about it, then essentially you are attached to the trade, and will, in the long run, be a loser.
So because he did not explain why it was so essential to keep records, the reader does not know how to replicate that needed element in something that may not be concurrent with what the author advised. For example, before charts were electronic, one could get the exact SAME psychological benefit of focusing on the now moment and improving attitude by taking records of what the market does, and updating charts manually.
Jesse Livermore's 1940 book "How to Trade Stocks" displays this perfectly. Livermore advocated keeping strict records of what the MARKET did, not essentially what his trade did. If Elder showed why a certain aspect of his book was important, he would leave the door open for traders to creatively find other ways to achieve the same effect as taking good records. (I have heard of market makers keeping great records of delta exposure daily that were great for them when they could not keep track of every trade they did.)
I was hoping that Elder would go a bit more in depth into why psychologically, he had his methods, but I have one more complaint. The way he constantly tells the reader how a professional trader compares to an amateur is a bit annoying after awhile. Professionals share one thing in common, and that is a winning attitude, but they DO NOT share methods in common. There are tons of ways to skin a cat, Elder may think that buying options is for amateurs, but he should talk to a lot of hedgies that were long volatility into some of the events that rocketed the markets in the 90s. They were glad they were long options, and they are still around today to tell the tale, unlike LTCM and other firms that thought selling volatility was the only way to go.
My final verdict? I respect Elder immensely for what he has done, and like the fact that he released this book to help people when he easily could have been trading and making more money. But this book's value is really not worth it over "Trading Room." If you then add in all the other great trading books out there, buying books like this for this price really cannot be justified unless you are like me, and just want the experience of Elder's latest. Great book Elder, bad price, hats off and congratulations.
A single chapter worth the price I think a book means different things to different people depending on where we are in our education. I bought this book because another reviewer mentioned the method the author described for keeping track of investments--why I bought stocks, why I sold them, what I could have done differently, and so on. I have serious problems keeping a trading journal that is helpful. I wanted to see what Elder recommended.
I was not disappointed. I would have bought this book for that section alone.
Glistering Candles As an experienced trader, what I liked best about Dr Elder's latest book is that (1) he goes into detail on different possible selling methods and (2) when advising shorting methods Dr Elder does not try to convince the reader about his own method, but he gently presents different ideas which are very nicely illustrated. I found many ideas that I can readily apply even though I use different tools than those presented in the book.
After reading this book, beginners will want to go back to Dr Elder's two masterpieces: "Trading for a Living" and "Come into my Trading Room", which offer more explanations and examples on Dr Elder's systematic approach to trading. I remember that, after closing "Come into my Trading Room", I had the feeling of a trading method that was completely disclosed under the bright light. "Sell and Sell Short" felt like a gift made of glistering candles: each candle brings some light on the market, but it is up to us to test and integrate them into our own trading method. I think that this book is meant that way: not to "teach", but to "show some different trading techniques" that are especially useful in bear markets.
In the interest of full disclosure I should mention that Dr Elder wrote the foreword to my book "Value in Time" and I have always been a great fan of his work.
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