Sell and Sell Short is a short book but
packed tightly with some valuable concepts for the professional private
Elder advises that to sell well one must
first buy well, so the first 3 chapter of the book discusses effective
buying methodologies ensuring correct money and risk management, as well
as the correct psychological mindset, coupled with record keeping,
trading post mortems and performance self-assessment. These discussions
are brief as it is not the focus of the book and Elder draws on excerpts
from previous books he has written.
Part 2 of the book deals with selling (or
exiting long-side positions). Elder categorises this activity into 3
branches, selling at a target, selling on a stop, and selling what he
calls “engine noise” (aborting trades that don’t act right or that have
changed since the time of entry).
Part 3 deals with selling short (opening
short positions). Unlike many trading books where authors suggest that
selling short is basically a mirror image of buying – only that price
moves tend to occur more rapidly; Elder suggests that there are more
distinctions than this and offers some practical tips on approaching the
market from the short side that I had not read before.
The author’s down-to-earth, humble respect
for the markets is evident throughout the book. He shares examples of
his own private trades – some successful ones and some unsuccessful
ones, ones where his execution were excellent, and others where the
execution was decidedly less so (it is heartening to see that great
traders make the same mistakes we do at times!) but in every case
important learnings are gleaned. His power word “enough” reminds
traders that more for more’s sake is the greedy trader’s downfall, and
impedes effective selling.
Written in his easy-to-read, no-nonsense
style, Elder’s book delivers some useful approaches to selling and
selling short and is a worthy title for your trading library.