Psychiatrist-turned-trader and trading educator
Alexander Elder
Alexander Elder is a Russian-born American trader and author who was born in Leningrad, grew up in Estonia, trained as a physician and practised psychiatry in New York, where he taught at Columbia University. He founded Financial Trading Seminars (now elder.com) in 1988 and the SpikeTrade group in 2004. His books include Trading for a Living (1993) and Come Into My Trading Room (2002), named a Barron's book of the year.
What they argue
- Trading success rests on three Ms: Mind (psychology), Method (analysis and systems) and Money (risk management).
- Risk should be capped per trade (his 2% rule) and per month: stop trading once losses reach 6% of capital in a month (his 6% rule).
- Indicators should be used to enter cautiously but exit fast; his Impulse System forbids buying when trend and momentum are both falling.
Sources
Summaries are Be The Puck's paraphrase of public material. Be The Puck has no affiliation with the people listed.
Books and papers
- Trading for a Living (1993)
- Come Into My Trading Room (2002)
- Entries & Exits (2006)
- The New Sell & Sell Short (2011)
Alexander Elder's Triple Screen (weekly tide, daily wave, breakout trigger)
Rule and full recordTrend following · daily
Three screens in a row: the weekly trend must be up, the daily chart must show a pullback, and price must then break the previous day's high. Out when the weekly trend turns down.
Best risk-adjusted results against buy and hold:
Elder impulse system
Rule and full recordMomentum · daily
Colours each day by trend (13-day EMA) and momentum (MACD histogram). Green when both rise, red when both fall.
Best risk-adjusted results against buy and hold:
Elder's 13-day Force Index zero-line switch
Rule and full recordVolume & money flow · daily
Each day's price change times its volume, smoothed over 13 days. Elder takes a value above zero to mean the bulls control the trend.
Best risk-adjusted results against buy and hold: