Trading for a Living (1993)
Dr. Alexander Elder, 1993 (a classic)



"Trading for a Living" was Dr Elder first book, and he has since provided his wonderful first born brainchild with a similarly mentally gifted companion, "Come Into My Trading Room".

Dr Elder is a professional trader and a practicing psychiatrist and believes that successful trading stands supported by the pillars of the 3 m’s -- Mind, Method and Money.  The first is emphatically the MIND.

The first chapter is called “Psychology is the Key” and with those words he sets not only the tone of the book but as he believes - the tone of the market.  For in Dr. Elder’s view, "the psychology of thousands of traders merge into huge psychological tides that move the market”. Although the psychological section is only two out of 10 chapters, they are meaty and first most.

By page three he is showing you how to get off the emotional trading roller coaster as  he looks at such things as gender differences in trading, self fulfillment, the various psychological myths. His myth busting explodes the brain myth, the under capitalization myth, the autopilot myth and various other types of psychological fantasies about trading gurus (whom he names) as well as garden variety wishful thinking about trading. 

Delaminating Self Destructive Behavior

His insights on self destructive behavior are bang on the money, as he sheds the  light of his learned psychiatric perspective on gambling and other patterns of self sabotage, even as far as offering trading lessons from Alcoholics Anonymous.  Elders epiphany about how to handle losses the way AA handles alcoholism enables traders with a valuable mental  skill set that could immediately improve any trader’s results, as it did for Elder himself. 

In expanding his AA insight applying it to Losers Anonymous and Gamblers Anonymous like a mind opening crowbar he takes a clear eyed look at some of trading's most insidious self destructive behaviors. Just as an alcoholic proceeds from social drinking to drunkenness, losers and gamblers take bigger and bigger risks. They feel the urge to trade just as alcoholics feel the urge to drink.  All trade impulsively, go on trading binges,  try to trade their way out of an psychological hole by getting high, and hide losses from themselves and others.  Elder offers the same seven steps to becoming a winning trader that he formulated to help himself avoid the pitfalls he is intimately accustomed to encountering in his psychiatric pratice.

Mass Psychology

Chapter Two deals with the importance of understanding the mass psychology of the market, the consensus of value, behavior patterns, trading advisory mentality, trading contests, and various ways that the very social human species has a natural tendency to herd.  This herding instinct creates crowd leaders, psychology of trends, poll taking of the mass market mind etc., and leads Elder to advise, “Read the market, manage yourself”.

Trading psychology peppers the  balance of the book as he goes on to teach his other two pillars, Trading Method and Money Management, with a special chapter devoted to Psychological Indicators, also known as Consensus Indicators, or Contrary Opinion Indicators.

With this timeless book, although originally printed in 1993, you have a definite mental “leg up” whether trading stocks, futures, currencies or options by limiting your mental risks, which are as vital to a trader as a safety net is to a high-wire walker

Reviewer's Bottom Line

Learning to limit your mental risks and eliminate self destructive behavior is imperative for a trader. Although this book is not dedicated solely to trader mental training, it's two chapters devoted to the topic and the pervading psychology throughout make it invaluable -- doubly so because trading attracts an inordinately high number of gamblers, losers and alcoholics. Even though you may not classify yourself this way understanding this mentality is illuminating and enormously instructional.

Trading for a Living Features:

• Timeless Mind Training Advice
• Technical Trading Strategy laced with Trading Psychology
• Addresses Gambling, Alcoholics and Losers Mentality regarding Trading
• Balancing Mind, Method and Money
• Debunking numerous trading psychology myths
• Comes with separate Study Guide and Audio CD

Reviewed by:
Patricia Chamberlin, Mind Trainer
MindPower for Peak Performance Trading