While trading may seem as easy as "buy low and sell high," the reality is far different. Ever-changing market trends can make for turbulent trading sessions, while lack of concentration can lead to costly mistakes.
With nearly twenty years of trading and investing experience in a wide array of markets, author John Forman knows what it takes to succeed in this arena, and with The Essentials of Trading, he shows you how.
Written for those just beginning their journey through the world of trading, this straightforward and accessible guide provides a base of knowledge and understanding from which you can develop trading methods, systems, and techniques that best suit your personality, situation, and financial objectives. Filled with in-depth insight and practical advice, The Essentials of Trading first takes you through the basics of placing a trade and understanding how markets work, and then progresses to the development of trading plans, the implementation of risk management, and the building of trading systems. Along the way, the use of exercises and examples brings these and other topics to life.
By following the proven principles outlined within these pages, you'll learn how to:
- Analyze the markets
- Execute, manage, and monitor trades
- Design, test, and compare trading systems
- Determine the best trading arena in which to operate
- Take your trading forward, beyond the basics
- And much more
Since there is not enough room here to go into detail on every subject put forward, additional resources for this book have been compiled to allow you to research specific topics of interest. This Web site also provides access to the support tools mentioned at various points in the text, as well as to the free companion workbook designed to complement this book.
While you don't need to be a financial genius to make it as a trader, you do need to be disciplined in your approach to the markets. With The Essentials of Trading by your side, you'll discover what it means to be a successful trader and how to put together an effective plan of action for your trading as a whole and on a transaction-by-transaction basis with a system.
Table of Contents
About the Author
Chapter 1. Introduction and Getting Started
Chapter 2. Trading Mechanics
Behind the Trade
Managing the Trade
Chapter 3. Price Action and Its Influences
Influences on Price
Chapter 4. Building the Trading Plan
What's a Trading Plan?
Chapter 5. Risk and Money Management
What Is Risk?
Money Management - Trade
Money Management - Portfolio
Chapter 6. Market Analysis
Analyzing the Markets
Chapter 7. System Design and Testing
Trading Systems Defined
A Sample System
Defining the System Focus
Entry and Exit Rules
Test I--SMA Only for Buy or Sell
Test II--SAR Only for Buy or Sell
Test III--SMA Enter/SAR Exit
Test IV--SAR Enter/SMA Exit
8. System Results and Position Size
Trade Size Determination
Risk and Position Size
The Final System
Chapter 9. Application
A Few Last Plan/System Points
Taking It Forward
Appendix A: Boxes
Box Trading Strategies
Additional Combination Strategies
Appendix B: Sample System
A Few Advanced Words
Part I--Identifying the Stocks
Part II--Going After Big Returns