A Beginner's Guide to Short-Term Trading
05/01/2008 12:00 am EST
Novice traders, as well as investors who are looking to pump up their success, will find plenty to like about Turner’s latest book.
I know from interviewing many trading experts that they often despair at beginning traders who picture the art of trading as a Wild West scenario, involving high-risk, ‘winner-take-all’ strategies. But those who have achieved success in this arena know that a well-planned and disciplined approach is truly the only way to win.
And that’s where Turner’s book comes in. First, Turner requires that traders learn the fundamentals of investing, explaining what the exchanges do, how the market works (and why you can’t always trust it!), the differences among brokers and commissions, and how margin accounts can work for or against you.
Once you have a good understanding of these essentials, Turner takes readers through the very basics of developing a trading strategy, including a bit of self-analysis (to see if you have what it takes), the importance of channeling your emotions, the mechanics of planning your trades, goal-setting, and even how to set up your office for maximum efficiency.
Then, getting down to the nitty-gritty, Turner defines the elements of both technical and fundamental analysis and shares some of her favorite resources for research. She thoroughly examines and explains basis charts and indicators and provides plenty of trading examples to help novice traders get their feet wet.
After the basics are dealt with, Turner delves into how to really turn your trading techniques into profits, covering specifics on money management, risk/reward calculation, stops, and order types. She devotes an entire chapter to a range of shorting strategies, including examples and charts to demonstrate her points.
And in a unique twist, Turner gives readers detailed tactics on using exchange-traded-funds as trading and hedging vehicles.
She closes her book by recommending the components of the big picture that traders will need to monitor, including Federal Reserve actions as well as changing economic and market conditions that can greatly affect your strategies and success.
One aspect that I really liked about this book was Turner’s approach to her readers. Unlike the majority of strictly-business manuals I usually see, she gives the reader the feeling that she earnestly wants you to learn about and profit from trading. And she is very upfront about the reality of trading, including the loss potential if you decide to play cowboy and trade cavalierly. She wants the reader to make sure that they know exactly what they are getting into. And if they do, she will show them how to be successful.
Building on that concept, at the end of each chapter, Turner provides a self-check to make sure readers are grasping the material thus far, before proceeding to the next step. After all, trading and investing are similar to the math classes we take throughout elementary school. If you don’t learn how to multiply before you tackle algebra, you won’t succeed.
Wanna-be traders, be warned! If you’re serious, this is a great book for you. If you’re just looking for ‘hot’ strategies, keep searching your bookseller’s shelves!