Entries and Exits: Visits to 16 Trading Rooms (Alexander Elder, 2006)

1. There is no set amount of time to learn to trade.
2. Trade for track record instead of big wins.
3. Look at the chart consistently to look for opportunity instead of catch as catch can or waltz in like a gambler.
4. Paper trading is necessary to test your discipline and if you are persistence to do your homework.
5. Hardware is not as important as the driver of the vehicle.
6. Do not trust daily advisory or blackbox signals.
7. Keep a record of your trading history.
8. Do not waste time with broker with trading system.
9. Commit more time to the field you know than to look for greener passtures.
10. Stay away from commerical tutoring and talk to experts instead.
11. Be exposed to trading buddies or groups.
12. Keep a trading checklist.
13. Anyone can enter a trade but it takes knowledge and experience to manage the exit and risk.
14. The more you trade, the faster you will learn.
15. Create self-imposed limit by using money management.
16. Trader with scientific background have good discipline but they tend to rigidity and arrogance.
17. Keep foundation strong and spend time studying the market than trading.
18. There is not 100% certainty so the pros are comfortable with uncertainty as long as their financial risk is low.
19. Don't expect mentorship from people you don't know, they always prey on the weakest trader.
20. Only share your completed trades with others as not to be influenced.
21. Unlike casino where once the cards are dealt you cannot lay down a bet.
22. Market is 3/4 psychology and 1/4 economics.
23. When the news is out it means the news is stale and the trend is near its end.
24. Losers often suffer from indecision and self-doubt.
25. 
    
26. Fear of pulling the trigger (FPT) happens when the trader overtraded and to overcome this is to reduce the trading size.
27. Traumatised traders need to take break, study the market and start with smaller lot size.
28. A tick is the smallest price change allowed in any given market.
29. To pick a stock: research into stock industry groups, articles in the media, newsletter recommendations or tips heard at a party.
30. Bond price may go down then government raise interest rates to curb inflation.
31. In currency trading when the against currency drop, the intial currency will rise.
32. Stocks are grouped by industry or subgroups in related fields.
33. It is impossible to analyse all the stocks so start from industry groups.
34. Buy the stocks from the strongest company from the strongest group.
35. Only act when a trade goes against you.
36. Gold tend to lead metal prices and commodity-related stock may be affected too.
37. Futures and options are usually more expensive nearing to expiration.
38. To trade futures, the contract size, trading hours and first notice day must be taken note of.
39. Always check out new contracts and make adjustments.
40. If the news doesn't go accordingly as planned, you can buy only half of the lot size.
41. Don't change your plan just because the trade is going South, you have a stop loss and risk management for that reason.
42. Only reevaluate if the market become erratic, otherwise stick to your plan.
43. Stock can go either way after a positive or negative financial report.
44. In natural disaster, the market will increase volatility, bonds to rise and reduce your trading size.
45. Classical charting keeps you closer to price data than technical indicators.
46. Likely continuation: rally + tall bar + closing near the high & a breakout below the previous low + tall bar + high volume; likely reversal: rally + tall bar + short and stunted bar & decline + narrow range day with high volume
47. When gaping happened it means you missed the entry and have to reevaluate or look for trades elsewhere.
48. Markets spend more time moving sideways than up or down.
49. Stocks rallied early in 1 bull market are likely to rally early in the next bull market.
50. EMA: upturn of a flat EMA = buy, return prices to a falling EMA = sell, the area between a fast and slow EMA is a sweet zone for entering trades.
51. Moving average has more inertia than price, it tends to chug along at a steady pace.
52. A divergence of a technical indicator when prices hit their channel wall warns of a reversal.
53. Hierarchy of indicators in weekly basis: moving average > MACD > price outside envelope > Stochastic > Force Index.
54. Impulse System is based on two indicators, a exponential moving average over a number of days and the MACD histogram.
55. Developing a system: > concept > objective rules > check signals on charts > test > evaluate.
56. A system trader must trade all signals, has little interest in the outcome and have a rule to stop.
57. When a naked put goes down: short the stock, sell a call or buy a put.
58. Pascal slicing emall effective volume reflects the behaviour of public traders.
59. Never expect the stock to go to moon and stick to your risk management.
60. 2% rule is the maximum level of risk per trade.
61. 6% rule means the trader cannot risk more than 6% of the account size per month.
62. Averaging down the price is okay but not exceeding 6% per month.
63. Your stop loss is unrealised profit/loss adds to your risk %.
64. Spreadsheet to record: data and price of entry and exit, position size, commissions, and slippage.
65. Trader's diary: charting with entry and exit signals, and notes about your feelings to technical signals.
66. Rating your trade is as important to win and loss as if you can't explain your win it is also as good as gambling.
67. Trade grade: A = >30%, B = 20% - 30%, C =10% - 20%, D = <10%.
68. Weekend homework: rating of key market indexes, ratings of stock industry groups, earning calendar, and fundamental announcements.
69. OCO: one-cancels-the-other. To avoid slippage, use limit orders.
70. The greater fool theory argues that prices go up because people are able to sell overpriced securities to a "greater fool," whether or not they are overvalued.
71. Wait for multiple pullbacks before going into order.
72. Stock price can continue to rise after a few upward spike and a forceful downward spike indicates panic.
73. Impulse system consist of EMA and MACD, when these indicators contradict one another, there is a trading opportunity.
74. When volatiliy fell and oscillators showing a divergence it could be a reversal.
75. Falling MACD-histogram means the trend become weaker.
76. Trendlines should be used with MACD to see how strong the trend is.
77. Watch out for the one-month cycle too.
78. Watch out for new highs and lows in previous months.
79. Bollinger bands measures volatility and inhale when volatile and exhale (squeeze) when it is not.
80. The larger the foundation, the taller the building. A kangaroo tail from a congestion zone signifies upcoming big movement.
81. An unconfirmed rally reaches higher high while confirmed decline takes out previous low.
82. Short after a kangaroo tail and MACD-histogram settling down.
83. Bollinger Bands: place a buy stop above the right range to catch surge.
84. Short when MACD, Momentum and Stochastic showing a decline.
85. Take action when Impulse have a conflict. EMA move further when the trend is stronger.
86. EMA is like a rhythm where prices will pull away and snap back like a rubber band.
87. Missing right shoulder may mean a reversal.
88. Falling wedge + lower band in BB signals a reversal.
89. Forex Club Sentiment Index (FCSI).
90. MACD-histogram shows reversal when market reject in a sloping manner.
91. Don't take any action when the chart is unclear, you cannot miss strong or important trading signals.
92. When price fall but the volume declines, it shows that bears are becoming weaker.
93. Put together several pirces of evidence and decide whether the bullish or the bearish carries a greater weight.
94. Put envelopes around EMA to know at a glance when the market is overbought or oversold.
95. During strong trends, breakouts are usually followed by pullbacks into the channel.
96. Success tend to lead to more success, and failture breeds more failure. A person who lost in one market is likely to lose in another.
97. Always going against the crowd is a poor idea.
98. Overtrading is one of the leading causes of traders' mortality.
99. Your advantage will be the ability to stand aside until you see the setup you want.
100. The 1st loss is the best loss, the longer you wait, the more you lose.
101. Put external limits on everyday trade, regardless of their opinion or intuition.
102. Follow your rules and do not deviate from them.