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Study Guide for The New Trading for a Living

by Alexander Elder (2014)

Quick summary -- an in-depth PhD-level extended summary (10-30 pages) for this book is coming soon.

Study Guide for The New Trading for a Living

Author: Alexander Elder | Categories: Trading Psychology, Risk Management, Technical Analysis, Education

Executive Summary

The "Study Guide for The New Trading for a Living" by Dr. Alexander Elder is a companion workbook designed to test, reinforce, and deepen understanding of the concepts presented in the main text. Published in 2014, the guide contains over 100 questions organized in two parts: questions with rating scales in Part I and detailed answers with commentary in Part II. Each question is linked to a specific chapter covering psychology, market analysis, risk management, indicators, and record-keeping.

Core Thesis & Arguments

The guide's premise is that experienced traders appear to glide through markets effortlessly, but this illusion vanishes when one confronts the actual complexity of trading. Success requires deliberate study, self-assessment, and the willingness to identify and correct blind spots. Elder argues that answering questions and comparing responses to expert analysis is a more effective learning method than passive reading.

Chapter-by-Chapter Analysis

Part I: Questions and Rating Scales

Organized identically to the main book's eleven sections (Introduction, Individual Psychology, Mass Psychology, Classical Chart Analysis, Computerized Technical Analysis, Volume and Time, General Market Indicators, Trading Systems, Trading Vehicles, Risk Management, Practical Details, Good Record-Keeping). Each section contains multiple-choice and chart-based questions designed to test conceptual understanding and practical application.

Part II: Answers and Comments

Provides detailed explanations for each question, often expanding on the original text with additional insights and practical observations. Many answers include discussion of common mistakes and misconceptions.

Key Concepts & Frameworks

  • Active Learning Methodology: Using questions to test comprehension rather than passive reading.
  • Chart Practice: Covering charts with paper and revealing them bar-by-bar to simulate real-time decision-making under uncertainty.
  • Self-Assessment: Rating scales allow traders to track improvement over multiple attempts at the same questions.

Practical Trading Applications

  1. Use the guide to identify weak areas in your trading knowledge before risking real capital.
  2. Retake the assessments periodically to measure improvement and catch conceptual drift.
  3. Practice chart analysis by covering the right side of charts and making decisions with limited information.

Critical Assessment

Strengths: Forces active engagement with material. Structured self-assessment reveals blind spots. Excellent companion to the main text.

Weaknesses: Limited utility without the main book. Some questions may feel dated.

Best for: Readers of The New Trading for a Living who want to ensure they have truly internalized the material rather than just passively read it.

Conclusion & Recommendation

A valuable supplement for serious students of Elder's methodology. The active learning approach is significantly more effective than simple rereading and should be considered essential for anyone committed to mastering the material in the main text.