Come Into My Trading Room: A Complete Guide to Trading

I owe a great deal to Dr. Elder's and his book Trading for a Living, though I was quite successful before I finally bought his book, it added another dimension, and gave me more sound understanding in what I was doing. Trading For A Living is a book I highly reccommend for anyone who's thinking about trying to enter the world of trading. This book is just as equally superb, with more depth into the technicals, that are definitely going to be useful for Futures traders. I'm 22 years old, and I truly respect the works that Dr. Elder's has put together, but I'm an options trader... let me refine that even more, I strictly buy calls and puts, I don't write calls at all, I'm not a professional, don't want to be. I did a few times and made a good amount of money, but didn't like the risk. I find his writing on options, even though it makes up only a few pages, is full of horrible misconceptions, and is completely divorced from the way an options trader thinks. Given the man is a futures trader, and almost gives nothing but praise for futures, while giving the most gloomiest views of stocks and options, and futures are time laden and levergaged product with nearly unlimited risk, I'd think he'd see the value in options instead of referring to them as lottery tickets, or as sucker bets. However, I don't want this to become all of my review, I feel it is something that has to be mentioned before the rest of the book can be talked about. Options are not only a reliable form of trading, they are a legitimate form for someone like myself who swing trades and never holds a position longer than six weeks. On Options: I'm just going to be very clear. He's right about all the mistakes amateurs make, I'm not denying that if someone enters the market with the gambler mentality, they're not going to lose everything, but that's the same thing in any market. It's all about money management, as it is for futures or stocks, I've traded both and doubled my money in stocks, before I found options. I trade options, not because I can't afford the other stuff, or because I'm looking to get rich quick--I want to make a career out of this--but because options fit into how I percieve the act of buying and selling, they fit my personality, and my attitude to the market (that of swing trading. I've barely ever held a position longer than 6 weeks). How much are you willing to lose, is the first real question anyone trading anything should ask themselves. I made a fortune by using the massive leverage of options, with never risking more than the money I would've lost had the stocks turned against me had I bought the stock (i.e, if I had a 5,000 dollar account and XYZ is breaking out of a bullish pennant at 18.50, and the 19.50 options are .50 cents, if I was going to buy 150 shares of the stock with my capital and set a stop loss at 17.00, I was willing to risk 225 dollars. I could buy 4 19.50 options for 200 dollars plus commissions, representing 400 shares of stock. The bet would be that the stock would rise a dollar in three weeks, my total risk, 205 dollars. If the stock goes up 20%, I would make more or less, 400% on my money. Worst case, it falls and I lose my two hundred. Average case, it does nothing, and I close out a week later with a 20 to 50% loss of capital. When you do options like that, and are a swing trader, like I am, options are not only safer--protecting me against gap downs--they are downright excellent at creating wealth). You risk more than one hundred percent of your investment when you buy futures, in fact you can actually lose more than you have in your account. If you're in full margin in a stock, and something happens, a scandal is revealed, the company goes bankrupt, you'd owe them the other half. In options, the underlying asset could go to zero, and you've lost only what you invested--that's what they mean by limited risk. But like Futures, like stocks on margin, you can cut your losses in options. That's right. As long as there's a bid, you can sell it. That means you can limit how much you are willing to lose. What a novel idea!!! It's not like money management is part of Elder's system... oh wait, it's the hallmark of the man's system. One of my best friends works in a hedge fund in Boston and trades options and stocks--he doesn't write options, he trades them. My biggest trade this year right now, is Priceline, I had 20 contracts, front month August, at 230, they cost me a little less than 8,000 dollars, I sold them for a little under 70,000 dollars, literally five days after I bought them. 20 contracts represented 2,000 shares of a stock trading at 228, which would've cost me 456,000 dollars. 8,000 dollars at that time represented less than 5 percent of my account (I will admit that I had no idea it was going to move like that, and was pleasantly surprised). I could've bought the stock using full margin, and fifty percent of my account, but why should I, since I was sure if a move was going to happen, it would in a couple a few days to a week or two, and I'd have till August 20th, and it was still July, if it didn't, I was pretty sure it was going to drop, and I didn't know how fast it was going to drop. If I did not respect Dr. Elders, that small 2 and a half pages would've turned me off his book completely. I want to make it clear. Dr. Elders is a brilliant man when it comes to Futures and technical analysis and the psychology of the market. But he should leave trading instruments alone. To his statement that no one he knows has built their capital with options, maybe that's true, I don't know who he knows. But the young men who formed Cornwall Capital turned 110,000 dollars into 30 million buying options before using credit default swaps to turn 30 million into 120 million. Victor Sperandeo, a professional trader, who traded options, and claims that 40% of all his market winnings came from options, and that he got started by trading options. Jim Cramer used options for the trade that paid for his entire education as he explains in his book, in fact, reading Confessions of a Stree Addict, it's clear he's used options a lot. Mark Weinstein started his fortune trading futures, got hit bad, went to trading options, turned 100,000 into 900,000 in three months, according to market wizards. Michael Parnese started off trading options in the wild bull market, where he turned 30,000 into 7 million. Marty Schwartz started off as an options trader, before he went to stock index futures, he truly built his fortune trading options, starting with 10,000 on the AMEX. I think when you state a matter of opinion, with limited knowledge, and few facts, you fail. He gives an example of stupid options trader, who let's his contracts expire worthless. Except for the times that I'm up over 300%, have gotten my money back, plus a profit, scaling out of the trade, I've never gone into the last week of trading, in fact, I'm usually out a month before the options expire, if not at least one week before (if they're front month options), every options trader I know does the same thing. Now to the rest of his book. Like he does in Trading for A Living, he goes through many forms of technical analysis, I feel this one was more in depth, and tailored to experience, though an amateur can certainly get some good ideas from it. He details lays out a great plan that coupled with Dr. Van K. Tharp's books Super Trader and Trade Your Way To Financial Freedom, I believe will get any person on the right track mentally to prepare to trade the markets. In the end, it really all is about controlling your emotion, controlling your money (taking care of losses and letting winners take care of themselves, no one's ever gotten in trouble cutting a winner short, plenty of would be millionaire's living on the street because they didn't cut their losses). This book is basically a psychological guide to prepare you, and it's a necessary one. I still prefer Trading for A Living, but have no regrets with this book at all, and reccommend it to anyone that ask me about the stock market.

An outstanding introduction for the beginning trader. Dr. Elder presents the SafeZone trailing stop indicator, a very simple but effective trading method based on price divergences from long term trends, and his Triple Screen System - which means using multiple time-frames to determine entry points. However, the method is presented as an example to illustrate the actual substance of the book - How To Become a Successful Trader. Dr. Elder covers the three aspects of success: Mind - Mastering your own mind is at the core of being successful in anything. Here he discusses the psychology of trading - how close it can come to gambling and how to avoid that. Method - Your actions must be correct to achieve success. Dr. Elder shows how to apply the concept of mastering your mind to an actual trading system. Money - Trading is a risky enterprise. "Managing risk" is another term for "trading profitably." - provided you own your 'mind,' and you've chosen a working 'method.' I don't believe there's anything wildly 'new' in "Come Into My Trading Room." It is not a technical analysis textbook (plenty of those around,) and it's certainly not a trading system in itself. It's a very clearly written, broad introduction to trading and a hands-on-guide to teaching yourself to be a successful trader. Most useful? If you already know all about keeping comprehensive records and written trading plans, if you've mastered self-discipline to prevent the gambling trap, then the next most valuable tool Dr. Elder gives us is a grading method to objectively measure the success of our trades, and ultimately our overall progress as traders. The SafeZone and Force Index indicators are clearly valuable, but they're like the secret spy ring to the rest of the books delicious Cracker-Jacks. Highly recommended as a 'First Read.'

My rating of 4 stars is an average of 5 stars for beginners and 3 stars for experienced traders. A significant part of this book is dedicated to psychology and money management which are aspects of trading that any experienced , profitable trader should have overcome. The portion of the book dedicated to trading methodology is slightly more than half of the pages in the book, which would be ok if it wasn't for the fact that very few new trading ideas are presented. The bulk of the trading techniques presented are based on divergences between specific technical indicators and price which are common knowledge to most moderately experienced traders. The author does present a couple of ideas that may be new to inexperienced traders such as Triple screen , however for me at least , this was a renaming of what most experienced traders commonly do ; that is look at both weekly and daily charts or multiple timeframes to insure that any stock they trade is trending their way over the long term. About 20 pages starting on page 193 deal with trading options which was done in a very basic way. This is to be expected since the book is mainly about stocks but what I felt was unwarranted was the negative view on options indicating that they are just empty hopes. Read the sentence on page 193: "Most hopes never get fulfilled but people keep hoping and buying options. Fund Managers....sell hope by the truckload to amateurs that buy calls in bull market and puts in bear markets". While this may be true on the surface, traders do make money with options often selling them or using them to augment their stock trading profit. In summary, this book can offer some useful ideas if you are a beginner , however if you have moderate trading experience your likely benefit is very limited.

Alexander Elder’s Come Into My Trading Room is a sharp, practical guide that expands on Trading for a Living. It delivers clear strategies for managing risk, mastering discipline, and building a sustainable trading routine. Elder’s insights into trader psychology and his structured approach make this book a powerful tool for anyone serious about long-term success in the markets. Concise, actionable, and inspiring.

The amount of material that this book covers makes it a must read for every trader out there. Cannot recommend enough!

Muito didático e traz conceitos bem sólidos de análise técnica. Ótimo tanto para aqueles que estão começando, quanto para traders experientes.

C'est l'ouvrage le plus intéressant que j'ai pu lire à présent, car il très complet et plus particulièrement concernant la gestion du risque (Money Management). L'auteur vous expose une méthode entière, de A à Z, et fourni les méthodes de calcul. Je ne peux que le recommander chaudement, aux débutants, intermédiaires et même aux initiés.

This book is a wonderful followup to Elder's classic "Trading for a Living." It covers all aspects of trading from risk management to how to manage your profits. The greatest strength of this book is that it addresses which instrument to trade based on the reader's preference rather than Elder's own opinion. He lays out the pros and cons of Stocks, Futures, Currencies, and Options then offers further recommended reading each prospective field. I found this exceedingly helpful and continue to use it as a reference when I am feeling unsure of what I should do next.