Saturday, October 24, 2009

Interview with Dr Alexander Elder

Found this on the net. A free read on important psychological aspects of trading.

Excerpt -

Dr. Elder: You know, I have something I call Five Bullets to a Clip. A trader is allowed five indicators max. I mean we're looking at five pieces of data, open, high/low, closed, volume, right? Plus open interest for futures. So using a large number of indicators is counterproductive. Get a small number and use them well.

In this book I show what I use: envelopes, moving averages. I heavily rely on the impulse system which is not really a trading system. I call it a censorship system which tells you you're not allowed to buy now, you are not allowed to sell short now. It keeps me out of the more dangerous trades. But that's about it; moving averages, envelopes, histogram, Force Index and, of course, the Impulse system.

Full text is found at -

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