This e-book shows the classic stock market axioms are not valid for short-term trading. These axioms are:
1. Avoid too frequent position switching.
2. The stock market has no past.
3. No one ever went broke taking profit.
4. Never buy a stock after a long decline.
5. Trend is your friend.
6. Never guess the bottom.
7. Never average down.
8. Cut your losses - use stop loss orders.
Every trader knows these axioms. However the majority of traders lose money in the stock market. Why? Because these axioms are wrong for short term-trading. This e-book lays out two simple rules:
1. All market axioms should be statistically proven.
2. Do not trust opinions. Trust the theory of probability.
Contents Include:
1. Basics of stock trading
1.1 How much profit is enough?
1.2 Return and risk
1.3 Profiting from chaos
1.4 Optimization of limit and stop orders
1.5 Computer analysis and real life
1.6 How to buy low and sell high
2. Stock price time dependence
2.1 Market memory
2.2 Trend and volatility
2.3 Time scales
2.4 Correlation
2.5 TD - mapping
3. Market statistics
3.1 Basic definitions
3.2 Dow Jones and others
3.3 Short term predictions
3.4 Average stock and average investor
4. Oversold stocks
4.1 Bottom fishing and the theory of probability
4.2 Stock selection system
4.3 Statistics for oversold stocks
4.4 Overnight moves
5. Basic Trading Strategy
5.1 Statistical Analysis of the Basic Trading Strategy
5.2 Transaction cost and the Basic Trading Strategy
5.3 How dangerous is this game>
5.4 Correlation with the market
6. Lower Risk Strategies
6.1 Stock are oversold - how much?
6.2 Low risk strategy
6.3 Very low risk strategy
7. You bought and ...
7.1 Further price drop
7.2 Moving up
7.3 When to sell
8. Limits and Stops
8.1 General remarks
8.2 Limit orders and average returns
8.3 Stop orders and average returns
9. Small stocks
9.1 Statistics for small stocks
9.2 Risk and return
9.3 Small stocks trading strategies
10. Selling short
10.1 How to define overbought stocks
10.2 Statistics for overbought stocks
10.3 Selling short strategies
11. Other trading strategies
11.1 How many days to hold?
11.2 How many stocks to buy?
11.3 Upgrades and downgrades
11.4 Trading tips
12. Trading portfolio
12.1 Theory of efficient portfolio
12.2 Using the theory of efficient portfolio |
