Book Review: Come Into My Trading Room: A Complete Guide to Trading by Alexander Elder

I have been reading constantly in order to improve on my trading/investing knowledge since my first trade about 2 years ago.

Recently, I came across my notes on the book Come Into My Trading Room: A Complete Guide to Trading by Alexander Elder.

This book is more for the day/intra-day trader, who looks at market signals/TA, timings of entries/exits etc. Not so much for the value investor.

Here are some excerpts from the book which I highlighted:-

1) To succeed in trading you need several innate traits without which you shouldn’t even start. They include discipline, risk tolerance, and facility with numbers.

2) A good signal jumps at you from the chart and grabs you by the face—you can’t miss it! It pays to wait for such signals instead of forcing trades when the market offers you none. Amateurs look for challenges; professionals look for easy trades. Losers get high from the action; the pros look for the best odds.

3) Bullish fundamentals must be confirmed by rising technical indicators; otherwise they are suspect. Bearish fundamentals must be confirmed by falling technical indicators. When fundamentals and technicals are in gear, a savvy trader can have a field day.

4) Win or lose, you have to gain knowledge from a trade in order to be a better trader tomorrow. Scan your fundamental information, read technical signals, implement your rules of money management and risk control.

5) A professional waits for familiar patterns to emerge from the market. Technical analysis tools will work for you only if you have the discipline to wait for patterns to emerge. Professionals trade only when markets offer them special advantages.

6) Most company news is released on a regular schedule. If you trade a certain stock, you should know well in advance when that company releases its earnings and be prepared for any market reaction to the news. Lighten up on your position if unsure about the impact of a coming announcement.

7) Rallies top out after enough wealthy bulls take their profits, while the money from new bulls is not enough to replace what was taken out.

8) Three essential pieces of information—the direction of price movement, its extent, and volume. Price represents the consensus of value among market participants. Volume reflects their level of commitment, financial as well as emotional. Price reflects what people think, and volume what they feel.

One important thing to note: this book has a 4.5 star rating based on 136 customers review on the Amazon website. This means that quite a number of people have read the book and found it to be useful.

You can read the reviews from others and/or get the book from Amazon here:-
Come Into My Trading Room: A Complete Guide to Trading


Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.