A concise and very useful summary of Alexander Elder's "Trading for a Living," known for its insights on trading and financial markets, presented in an easy and clear style:
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1️⃣ Basics of the book
The book focuses on three main pillars for successful trading:
1. Mind – the psychological aspect of trading.
2. Market – technical analysis and practical methods for understanding the market.
3. System (Money Management) – Capital management and risk reduction.
Elder emphasizes that any successful trader must be strong in all three areas together, not just one.
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2️⃣ The psychological aspect of trading
Controlling emotions is more important than all indicators.
Fear and greed are the greatest enemies of the trader.
Elder suggests managing discipline by writing a daily trading plan and reviewing it.
The idea of "trading as a psychological science": you must know yourself before entering the market.
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3️⃣ Technical analysis and markets
The book focuses on using technical indicators like MACD, RSI, and Moving Averages.
Elder prefers using daily and weekly charts to analyze trends.
Trading with the general market trend is better than trying to predict every short-term movement.
The importance of diversifying across markets and not focusing on just one market.
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4️⃣ Money management
The most important rule: do not risk more than 1–2% of your capital in a single trade.
Elder presents the concept of risk-adjusted returns (Reward-to-Risk Ratio).
It is essential to use stop-loss orders to limit losses.
Keeping a complete record of trades for review and continuous performance improvement.
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5️⃣ Additional tools and practices
The idea of automated trading but with human oversight.
Using trading strength indicators.
Training on position sizes and when to enter and exit the market.
Elder recommends that the trader be a lifelong learner and keep a journal of their decisions.
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6️⃣ Summary of the book
Successful trading = self-control + market analysis + capital management.
Even if you are a genius trader in analysis, without psychological discipline and money management, you will fail.
The book provides a step-by-step practical plan for any beginner or intermediate trader.
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🔍 This is information, not advice, and the market always carries risk, think with your mind and make your decision with your hands.$ETH
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