ok i saved three copies of ross's book in pdf file format on hard drive...
this was my method of study for ccie and it works well for me...
reading ross's book at this time....
Introduction...................................................................................... vii
The 10% of traders who consistently profit from the market share one common skill. They cap their losses. They accept that each trade has a predetermined level of risk and they adhere to the rules they set for that trade. This is part of a well-defined trading strategy.
I’ll admit that it’s extremely diffcult to achieve the level of discipline to sell when you hit your max loss on a trade. Nobody wants to lose, but the best traders are great losers. They accept their losses with grace and move on to the next trade. They never allow one trade the ability to destroy their account or their career. This characteristic will keep them in business as a day trader for a long time.
For new traders, we encourage starting with shorter blocks of time and maintaining a constant focus on the idea of thinking like a risk manager.
Chapter 1 Why do most traders fail? ........................................... 1
you can lose 50% of the time and still make money just as easily as you can be right 90% of the time and still lose money. You have to focus not on your percentage of success, but on your profit loss ratios.
The most important skill for a new trader to understand and adopt is the ability to cap their losses.
Chapter 2 Risk Management ............................................................ 6
You can develop a sense of mindfulness by journaling while you trade and then reviewing your notes after the market closes.
It is extremely important to understand, regardless of your strategy or the setups you trade, that every trade has the potential to double what you are risking. If you do not have the potential to win twice as much you risk, you should not be taking the trade. By simply understanding profit loss ratios and the huge statistical advantage of a 2:1 profit loss ratio, you have set yourself ahead of the majority of new traders.
If you are not already tracking all of your trades in an excel document, I suggest you start doing
this now.
The part of your profit loss ratio that is easiest to control is your max loss.
Every time we take a trade, we must know how much we are risking. This means understanding the logical place to sell the stock for a loss if the trend or the setup fails.
Every trading plan should have a max loss per trade and a max loss per day.
If you want to succeed as a trader, it is paramount that you are able to hold yourself to the rules of max loss per trade and max loss per day. Ultimately, this means walking away from the computer when you hit your max loss for the day, even if it is difficult.
Gamblers think about Profits, Traders think about Risk
Chapter 3 Stock Selection - Choosing the right stocks to trade ...................12
By trading only the strongest stocks and applying the principles of good risk management,
we can give ourselves a huge statistical advantage for success.
we can rest assured that every day there will be a stock trading on heavy volume due to news.
Chapter 4 Introduction to Candlesticks ....................................................23
Chapter 5 Setting Up Your Charts - Technical Indicators........................................29
focus on candlestick patterns as your primary source for finding setups.
Volume is a critical piece of information for my trading strategies. It would be very diffcult for me to trade without the volume bars.
Chapter 6 Support and Resistance .............................................................43
keep a close eye on how stocks trade around their moving averages.
Chapter 7 Order Types, Level2, Time & Sales, Hotkeys .........................53
I use limit orders with a 5 cent offset whenever I’m entering or exiting trades.
When there are a ton of orders executing from other traders, the time and sales window will be flashing as they pass through. This is what we want to see for strong momentum stocks breaking out.
Chapter 8 Trend (momentum) Trading Strategies ........................64
As soon as I enter a trade, I know the price where I will stop out for a loss. Remember, a gambler thinks about profts, but a trader things about risk (loss). We have to always return to our foundation as risk managers when we are trading.
When I find a stock that is gapping up more than 4%, and has more than 50k shares of pre-market volume, I consider it a gap and go contender.
As the trade progresses, I adjust my stops first to breakeven, and then into the profit zone. By holding that final position until my stop fired, it ensured I have traded the full range without selling too soon.
Chapter 9 Counter Trend (reversal) Trading Strategies .......................................95
Chapter 10 Stock Scanning & Building a Watch List ................................. 104
I fnd almost every single trade setup on one of my stock scanners. I use stock scanning software provided by Trade-Ideas (www.trade-ideas.com). I cannot speak highly enough about their tools. Without their scanning software, I would be lost as a trader.
Chapter 11 Three Step Day Trading Plan ...............................................111
Remember, that every single trade you take will give you a little bit more experience and a better understanding of the market. For that reason, the longer you are able to survive in the market breaking even, or just treading water with small profts, the greater your odds for success. You have to survive until your thrive.
During the first month in our trading plan, you will begin each morning with 30 minutes of aerobic exercise.
During our three Step Trading Plan, you will take 10 trades a day.
It is extremely important that you track every single trade in a spreadsheet.
Once you have completed a successful month in the simulated environment, you can consider
switching to a live trading account. Some students spend several months in a simulated
environment, before they achieve a level of success that they feel justified trading in a live
account.
Becoming a successful trader is not a process that can be rushed.
our students are proving that success is obtainable for those who work for it.
Conclusion ..............................................................115
by spending your time reading this book, you are showing a level of dedication that far exceeds the majority of new traders.
Trading is a career that certainly will not bore you, bu tcould overwhelm you if you are not able to cope with the emotional pressures. I emphasize to all of our students, the importance of balance in life. The best traders learn and maintain techniques to cope with stress, and remember to take time to get away from the computer screens and enjoy life. We work hard and we play hard. This is the life of a day trader. I hope you will join us.
Biography .................................................................................117
In his free time Ross enjoys sailing, gardening and fixing vintage Mercedes diesel engines. Ross lives with his family and his dogs in Great Barrington, Massachusetts.
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