Fly Fishing the Stock Market: How to Search for, Catch, and Net the Market's Best Trades
304
Fly Fishing the Stock Market: How to Search for, Catch, and Net the Market's Best Trades
304eBook
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Overview
In this engaging and accessible book, Dr. Stephen Morris describes how he generated astounding growth in his trading account during the volatile and confusing post-crisis financial markets. An expert fly fisherman, Morris explains that much like trading, successful fly fishing requires both an understanding of big-picture conditions and the ability to implement tactical techniques to land that prizewinning catch. As Morris explains, both fly fishing and trading require three psychological traits: passion, patience, and persistence.
Drawing on the teachings of Dr. Alexander Elder, Dr. Morris reveals how he integrated elements of Elder's approach to create his own distinctive method. With the same passion he has for fishing, Morris details how he uses technical indicators to determine what he calls the "market season" and then zeroes in on individual stock patterns to make his trades. Morris also reveals unique tools, such as the Weathervane and Weather Station, which give him a sense of the market's long-term condition and provides the basis for his trading and risk management strategies. By learning to deploy various tools, interpret their messages, and understand their interaction with each other and with prices, anyone can increase their skill and success as a trader.
Using actual examples from his trading experience, Morris offers an in-depth explanation of his approach to the market and provides a portrait of how a successful trader develops a method and implements it in real time. In addition to the illustrative examples, tools, and rules for placing orders, the book's companion website contains material that allows a trader to hone his skills in a hands-on fashion.
Just as a fly fisherman is in tune with each step in his process—matching the seasonal hatch, hooking up with a strike indicator, playing the fish with drag, and reeling it in—traders must constantly adjust their trading method to accommodate ever-changing market conditions. This book will help you achieve this elusive goal and consistently land winning trades.
Product Details
| ISBN-13: | 9781118408148 |
|---|---|
| Publisher: | Wiley |
| Publication date: | 06/26/2012 |
| Series: | Wiley Trading , #578 |
| Sold by: | JOHN WILEY & SONS |
| Format: | eBook |
| Pages: | 304 |
| File size: | 50 MB |
| Note: | This product may take a few minutes to download. |
About the Author
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Table of Contents
Introduction xiiiPart I Fly-Fishing Lessons
Chapter 1 Three P ’s in a Pod 3
Passion 4
Patience 4
Persistence 4
Chapter 2 The Tackle Box 7
What Goes into the Toolbox 8
Bar Charts and Candlesticks—Same Markets, Different Angles 9
Bullish and Bearish Engulfing Patterns 13
Trendlines 14
Tops 14
Bottoms 19
False Breakouts 20
Gaps 22
Triangles 26
Volume 26
Computerized Indicators 28
Moving Averages 30
Moving Average Convergence-Divergence 32
The Impulse System 39
Force Index 41
Conclusion 41
Chapter 3 Developing Your Technique 45
Analytical Tools and Steps 46
Understanding Entry Orders 49
Conclusion 51
Chapter 4 Expectations 53
Why Managed Funds Can Be “Dilutional” 54
Conclusion 58
Part II Expect the Unexpected
Chapter 5 Seeing is Not Believing 63
Getting Trapped at the Extreme Edge 64
Conclusion 66
Chapter 6 The Art of Deception 69
When the Prey is Exhausted 70
The Deceptions of V-Bottoms 71
The Deceptions of Symmetrical Triangles 73
The Deceptions of Ascending Triangles 74
The Deceptions of Head-and-Shoulders 77
The Deceptions of Breakouts 78
Conclusion 80
Part III Time to Go FISHing
Chapter 7 Fishing Seasons/Market Seasons 83
Market Seasons 83
The Influence of Volatility 85
Monitoring Market Season Changes 86
The Weathervane: A Market Timing Monitor 86
The Weather Station 94
Adding the Detail of Price Patterns to Strengthen the Message 96
Conclusion 99
Chapter 8 Matching the Hatch 101
Bottom Patterns 103
Pull-Back Patterns 115
Top Patterns 123
Pull-Up Patterns 130
The Symmetrical Triangle: An All-Around General-Purpose Pattern 136
Conclusion 150
Chapter 9 Terrestrials and Cut Banks 153
Fundamental Analysis 154
Using Fundamentals to Complement Technical Analysis 159
A Disconnect Between Technicals and Fundamentals 164
Fundamentals on Fire: Momentum Trading 165
Chasing the Big Ones 168
Conclusion 168
Chapter 10 Catch and Release 171
Setting the Hook with the Strike Indicator (Entry) 172
The Strike Indicator Entry Steps 174
Snag Management (Stop-Loss) 177
The Drag System (Trade Management/Profit Exit) 178
Examples of Drag Settings 181
Exit to Enter? 184
Conclusion 187
Chapter 11 A Word About Bait Fishing 189
Daily Bait-‘n’-Wait 191
Weekly Bait-‘n’-Wait 191
Monthly Bait-‘n’-Wait 192
Conclusion 193
Part IV Fishing Journal
Chapter 12 The Trophy Room 197
Neckline Break . . . Up: 9/28/09 198
The January Effect: 1/5/10 199
A Gem in the Junk Pile: 1/1/10 202
Greater Fool Trade: 4/17/10 204
The Perfect Storm: 2/5/10 207
Time of Possession: 8/14/10 210
W-Bottom: 9/11/10 213
Logical Entry and Exit—Long ENTR: 9/11/10 216
Conclusion 219
Chapter 13 The One That Got Away 221
GLF Trade 222
JTX Trade 225
RMBS Trade 227
Conclusion 229
Chapter 14 The Structure of Success 231
The Building Blocks Concept 232
Conclusion 246
Conclusion 249
Appendix A My Trading Journal 251
Value versus Momentum 252
Analysis 252
Group Strength 253
Trading and Position Sizing in Volatile Markets 253
Trade Management 254
Breakouts 256
Taking Profits 256
The Entry/Exit Review 256
Trading Systems 257
Trading Strategies 257
Learning and Progressing 257
Appendix B Table of Indicator Sets 259
References 261
About the Author 263
About the Website 265
Index 267