Sell and Sell Short, Study Guide (Alexander Elder, 2008)

• 3 great divides
• Technical vs. fundamental
• Trend vs. counter-trend
• Discretionery vs. systematic
• When a price is too far from the moving average, buy or sell on it
  
• The right mentality
• It is better not to trade when you are in foul mood.
• If you feel stressed or preoccupied, stand aside from the markets until your personal stress clears up.
• Successful traders love the game more than the profits.
• Risk at 2% and max risk of 6% a month.
• Basic Record-Keeping Spreadsheet
1. Source, group. I always want to know where my picks come from—my own research, the Spike group, mentioned earlier, webinars, etc. Of course I process all input from others through my own system and accept full responsibility for every trade.
2. Source, individual. If the pick came from a group, such as Spike or a webinar, I want to record the name of the individual whose pick I traded. Some people have an excellent track record, while others, seemingly very smart, lead me to losses. I want to track the quality of the tips that come my way.
3. Symbol. One could also add a column for the name of the stock. 
4. Quantity. If I exit this position not at once but in two or more trades, I insert a row following this one and split my purchase between two or more rows, depending on the number of exits. 
5. Long or short. I use Excel’s Auto Format to color a cell depending on whether it is a long (l) or short (s). Professionals are just as comfortable shorting as they are buying. 
6. Entry price. 
7. Entry date. 
8. Entry order (leave blank if your entry was at the order price). If you did not use a limit order and/or were filled at a price different from your order level, put the price at which you placed your order here.
9. Entry slippage. Calculates dollars won or lost and colors the cells a shade of red or green depending on the result. Using limit orders occasionally leads to positive slippage.
10. Entry commission. If you insert a line later (see point D), remember to split the commission. 
11. Exit price. 
12. Exit date. 
13. M.Exit order (similar to column H, above). 
14. Exit slippage (similar to column I, above). 
15. Exit commission. 
16. Fee. Assessed on selling, so if you go short, fill in this cell after receiving a confirmation that you sold short; otherwise fill in after selling your long position. 
17. P/L. Gross profit or loss, before commissions and fees, but after slippage, if any. 
18. Net. Net profit or loss after commissions and fees. 
19. Net, Spike. So many of my trades come from the Spike group that I have a special column in my spreadsheet for them. 
20. Net, webinars. Same idea as column U, V, W, X. These four columns show performance grades on every trade.
• Value buying
  
• Stop
• You need stops; a trade without a stop is a gamble. 
• You need to know where you’ll put your stop before you enter a trade (if the reward-to-risk ratio is poor, do not enter that trade). 
• Everybody needs hard stops; only expert discretionary traders are allowed to use soft stops, discussed below. 
• Whenever you change a stop, you may move it only in the direction of the trade.
• Relook your portfolio when there is engine noise
• Weakening momentum
• Options
• Covered writing
• Naked writing