You are previewing The Trader's Pendulum: The 10 Habits of Highly Successful Traders.
O'Reilly logo
The Trader's Pendulum: The 10 Habits of Highly Successful Traders

Book Description

The new trader's guide to the business, psychology, and hype in trading

The Trader's Pendulum + Website is the ultimate toolkit for realizing your trading potential. Written by one of North America's leading trading coaches, this guide is designed to show aspiring traders how to design and implement a successful trading strategy by learning the psychological tricks behind solid trading philosophies. New and experienced traders alike will find value in The 10 Habits of Successful Traders, and come away equipped to navigate the real-life emotional-psychological effects of market chaos. You'll learn to embrace change and risk, and use it to your benefit as you climb out of the technical trap and stop riding the Trader's Pendulum between fear and greed. Based on the author's Elliot Wave and Harmonics expertise, this invaluable guide brings you a top-down approach to the market to help you maximize profit and minimize poor choices. The companion website gives you access to an interactive Trader's Scorecard, models for your 'business' and trading plan, The Trading Blotter, and a video synopsis of the all-important 10 habits.

Today's global economy has forced people to search for a second cash flow stream to replace or supplement a primary income. It is more important than ever to have a reliable guide at your side, and this book gives you guidance and so much more.

  • Develop and follow a successful trading system

  • Make more money while saving time and effort

  • Treat trading like a business for lasting success

  • Use change and risk to your benefit

  • Stop chasing trends and listening to widely disseminated bad advice. The Trader's Pendulum + Website is more than a guide—it's advice, examples, models, and more, giving you a practical roadmap to your online trading success.

    Table of Contents

    1. Title Page
    2. Copyright
    3. Dedication
    4. Foreword
    5. Acknowledgements
    6. About the Author
    7. Prologue: A Day in the Life of a Successful Trader
      1. A Trader's Work Begins before He Starts to Trade
      2. The End of Trading Isn't the End of His Day
      3. What Can We Learn from This Successful Trader?
    8. Part I: Introduction
      1. Introduction: Riding the Trader's Pendulum
        1. The Futile Search for the “Perfect System”
        2. The Real Transformation Starts within the Trader
        3. How to Benefit from This Book
        4. The Pendulum Scenarios
        5. The Pendulum Factors
        6. Complementary Resources
        7. The Trader's Scorecard
      2. Chapter 1: The Successful Trader versus the Average Trader
        1. The Conversation that Changed Fred's Life
        2. When Reality Kicked in: Paper Trading versus “Real” Trading
        3. The Path Forward
        4. The Struggle of a Young Family
        5. A Perfect Plan Found?
        6. A Typical Afternoon of a Trader
        7. Trader by Chance
        8. Trader by Plan
        9. Dedicated Trader… or Slacker?
        10. The Life of a Trading Mom
        11. The Question You Need to Ask
      3. Chapter 2: The Technical Trader's Trap
        1. Revisiting the Cases of Fred and Stacey
        2. “Technical Junkie” versus Entrepreneurial Trader
        3. The Hobbyist and the Business Owner
        4. Are You in the Technical Trader's Trap?
        5. How to Get Yourself out of the <i xmlns="http://www.w3.org/1999/xhtml" xmlns:epub="http://www.idpf.org/2007/ops" xmlns:m="http://www.w3.org/1998/Math/MathML" xmlns:svg="http://www.w3.org/2000/svg" xmlns:ibooks="http://vocabulary.itunes.apple.com/rdf/ibooks/vocabulary-extensions-1.0">Technical Trader's Trap</i>
        6. Eating an Elephant a Bite at a Time
      4. Chapter 3: Becoming an Entrepreneurial Trader—The Process
        1. Steps to Transform from a “Technical Junkie” into an Entrepreneurial Trader
        2. The Trader's Quadrants: Where Are You Now, and Where Do You Want to Be?
        3. Trading Habit Cultivation
        4. What Kind of Trader Do You Want to Become?
        5. Pendulum Scenario 3.1: Fear versus Greed
    9. Part II: Out of Hobby into Business Mode
      1. Chapter 4: Habit #1: Establish a Trading Business for the Right Reasons
        1. The Negative Motivator
        2. Reasons for His Fight
        3. What Excites Successful Traders (It's Not All about the Money)
        4. The Main Reasons Why Traders Are Traders
        5. What Are the Reasons You're Trading?
        6. Pendulum Scenario 4.1: Get Rich Quick or Go Broke Quick
        7. Pendulum Scenario 4.2: Realistic versus Unrealistic Trader
      2. Chapter 5: Habit #2: Complete a Trader's Business Plan
        1. “Why Do I Need a Business Plan?”
        2. “But What if I Don't Have a Trader's Business Plan?”
        3. “What Should My Business Plan Cover?”
        4. “How Do I Set up My Trader's Business Plan?”
        5. Nine Steps in the Business Planning Process
        6. An Important Research Discovery That Can Help You Achieve Your Goals
        7. Pendulum Scenario 5.1: Clarity versus Muddled Thinking
        8. Pendulum Scenario 5.2: Forgiving versus Angry Trader
        9. Pendulum Scenario 5.3: Courage versus Conformity
      3. Chapter 6: Habit #3: Define Your Goals
        1. “How Did We Do That?”
        2. Tackling the Subjects in Your Trading Life
        3. Do You Plan to Trade Part-time or Full-time?
        4. What Time of Day Will You Set Aside for Trading?
        5. What Specific Goals Do You Have for Daily, Weekly, and Monthly Profits?
        6. What Trading Strategy Will You Employ, and What Are the Rules?
        7. Right and Wrong Goal Setting
        8. Working out the Numbers
        9. Checklist: How Your Profit Goals Give You a Framework for Trading
        10. The “Grading System” in Your Trading Journey
        11. Pendulum Scenario 6.1: Taking Action versus Feeling Remorse
        12. Pendulum Scenario 6.2: Enthusiastic versus Apathetic Trader
    10. Part III: Becoming an Entrepreneurial Trader
      1. Chapter 7: Habit #4: Commit to Your Education with a Trading Coach
        1. What Can a Trading Coach Do for You?
        2. How Do You Find a Trading Coach?
        3. Engaging a Coach Is an Investment, Not an Expense
        4. Pendulum Scenario 7.1: Foresight versus Hindsight
        5. Pendulum Scenario 7.2: The Lucky versus Unlucky Trader
        6. Pendulum Scenario 7.3: Calm versus Nervous Trader
      2. Chapter 8: Habit #5: Understand and Exploit Your Unique Trading Personality
        1. What about a One-Size-Fits-All Trading Style for Traders?
        2. Different Trading Styles
        3. How Do You Choose Your Trading Style?
        4. When Should You Get Help?
        5. Reducing the Dropout Rates of School Kids and Traders
        6. Pendulum Scenario 8.1: Self-Doubting versus Overconfidence
        7. Pendulum Scenario 8.2: Cautious versus Reckless Trading
      3. Chapter 9: Habit #6: Follow a System
        1. What Can You Learn from These Big Corporations?
        2. What Is the Difference between a Trading System, a Trading Strategy, and a Trade Plan?
        3. How to Set up Your Trading System
        4. Words of Caution for Traders in the <i xmlns="http://www.w3.org/1999/xhtml" xmlns:epub="http://www.idpf.org/2007/ops" xmlns:m="http://www.w3.org/1998/Math/MathML" xmlns:svg="http://www.w3.org/2000/svg" xmlns:ibooks="http://vocabulary.itunes.apple.com/rdf/ibooks/vocabulary-extensions-1.0">Technical Trader's Trap</i>
        5. Pendulum Scenario 9.1: Optimistic versus Pessimistic Trader
        6. Pendulum Scenario 9.2: Flexible versus Stubborn Trader
        7. Pendulum Scenario 9.3: Accepting versus Willful
      4. Chapter 10: Habit #7: Plan the Trade and Trade the Plan
        1. The Clichéd Wisdom
        2. Before You Construct Your Trade Plan
        3. How to Construct a Trade Plan
        4. About Losing Money
        5. Constructing a Trade Plan Based on a Trading System and Money Management Strategy
        6. Pendulum Scenario 10.1: Pragmatic versus Idealistic Trader
        7. Pendulum Scenario 10.2: Pulling the Trigger versus Having Regrets
        8. Pendulum Scenario 10.3: Conservative versus Impulsive Trader
    11. Part IV: The Transformed Trader
      1. Chapter 11: Habit #8: Measure Your Performance
        1. The Trading Journal
        2. The Daily Trading Blotter
        3. Profit and Loss (P&L) Statement
        4. Setting Realistic Expectations
        5. Some Important Performance Metrics
        6. Pendulum Scenario 11.1: Organized versus Disorganized Trader
        7. Pendulum Scenario 11.2: Proactive versus Reactive Trader
      2. Chapter 12: Habit #9: Learn the Secrets of Successful Traders
        1. Learning by Modeling Success
        2. A Day in the Life of a Successful Trader
        3. Winning Qualities of Successful Traders
        4. Where Do You Find Successful Traders to Model?
        5. Learning the Success Secrets by Reading
        6. Pendulum Scenario 12.1: I Can versus I Can't
        7. Pendulum Scenario 12.2: Patient versus Impatient Trader
        8. The Wisdom of Taking No Action
        9. Going from Patience to Impatience, Well-to-Do to Broke
        10. How to Temper Impatience
      3. Chapter 13: Habit #10: Add Balance to Your Life
        1. Symptoms of Trader Burnout
        2. Getting out of the Trap
        3. How to Achieve Balance in Trading Life and Maintain Motivation
        4. Your Life Plan
        5. Outline for Developing Your “Life Plan”
        6. Pendulum Scenario 13.1: Relaxed versus Stressed Trader
        7. Pendulum Scenario 13.2: Clear-headed versus Sorrowful Trader
        8. Pendulum Scenario 13.3: Good Mood versus Bad Mood Trading
      4. Chapter 14: The “10 Habits” Checklist
        1. 21 Days to Form a Habit?
        2. The “10 Habits” of Successful Traders
        3. “Where Are You Now, and Where Do You Aim to Be?”
        4. The Path of Transformation
        5. More than Theory
        6. How the Magic Number Came About
        7. Why It Does Not Matter
    12. Part V: The Trader's Tools
      1. Chapter 15: Analysis Toolbox—Your First Mentoring Session
        1. Trends and Market Cycles
        2. Trend Indicators
        3. Trend Lines and Channels
        4. End-of-Trend Market Reversals
        5. End-of-Trend Confirmations
        6. Support and Resistance
        7. Market Cycles and Elliott Wave Analysis
        8. Trend Wave Characteristics
        9. Corrective Wave Characteristics
      2. Chapter 16: Sample Trading System—Your BONUS Mentoring Session
        1. Fibonacci Filter Trading System Overview
        2. A. Chart Setup
        3. B. Trading Strategies
        4. C. Trading Rules
        5. D. Trade Plan
        6. E. Daily and Weekly Preparation
        7. F. Checklist
      3. Resources
        1. The FX Trader's EDGE Scorecard and Your FREE Coaching Session
        2. What's Covered in the Free Coaching Session?
        3. FX Trader's EDGE Coaching Process
        4. Other Valuable Resources
      4. Bibliography
      5. About the Companion Website
        1. Bonus Videos
      6. Index
    13. End User License Agreement