Sell and sell short

Hi, Have any of you read Alexander Elder’s latest book? I enjoyed ‘come into my trading room’ and its accompanying workbook. Thoughts and opinions welcome. Cheers in advance folks, K

I like Elders stuff, it’s a nice complement to the CFA curriculum because it talks about stuff that is somewhat heretical to CFAI orthodoxy. I did read sell and sell short and I must admit that I didn’t think it added much to what he has talked about before, but the substance is still good stuff.

bchadwick, Cheers for the feedback. Correct me if I’m wrong: so there isn’t really much point in shelling out for the ‘Sell and sell short’ book then? ‘Come into my trading room’ covers the long and short side anyways, was just curious to establish whether the sell short book gave any priceless guidance or anything… K

It´s been a while since I looked at it. I seem to recall there are a few little observations that are useful, but not enough to justify the cover price if you are already familiar with Elder´s other stuff. I really liked ´Come into my trading room.´ Very clear and nicely written. Why not pop into a Barnes and Noble (if you´re in the US) and browse it one sunday afternoon and see what you think.

bchadwick, I had thought of browsing it, but have been unable to get my hands on a copy in the book stores in my town. ‘Come into my trading room’ - yep, pretty good read, plus the workbook really makes it stick. I hope to apply his trading principles with success in the coming years. How do you rate Elder’s trading style? K

Kakane Wrote: ------------------------------------------------------- > > How do you rate Elder’s trading style? I´m not sure what you mean by this. What I like about Elder is that he connects technical analysis to believable theories about investor behavior, rather than simply talking in terms of “pattern recognition” as if it´s some arcane astrology or something. In the end, there is some pattern recognition in a lot of his techniques, but the patterns are basically a kind of shorthand for behavioral situations, and if you can´t look at a pattern and explain in words the investor behavior that it indicates, then you shouldn´t be using that pattern to trade. Does it work? I haven´t traded enough using his style to say for sure, mostly because I´m undercapitalized by his standards. However, I can say that his techniques - particularly the risk controls and money management - have helped me a lot. Elder is a Ph.D. psycologist and points out that our brains tend to push us to make bad investment decisions when we panic, so the risk controls and the money management techniques are a way to control that. Elder (and Van Tharp too) both point out that the technical analysis is actually a relatively small aspect of a full trading system - an aspect that gets much more attention and weight than it probably should, and probably because it is easy for marketers to wow people by concentrating on entry and exit signals. Both Elder and Tharp point out that if you have the risk control and position sizing methodologies right, you can almost have a random-entry system that performs adequately. Tharp actually demonstrates this in “Trade your way to financial freedom,” and it´s a trip.

bchadwick, I’d love to see your favorites book list. You seem to have read most of the major investment strategy books. I have developed one of my own but am still at the early stages of going through them.

I´ve been meaning to put together a list for some time, since my bookshelf has gotten large. If I do manage to do it, I´ll send you a copy.

I’ll be very interested in knowing what books helped you most in developing your investing mental model. I have compiled a large list myself, and there are probably quite a few overlaps between mine and yours.