Study Guide for Come Into My Trading Room - Forex Factory

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ANSWERS 193 Chart A8-b week, an even stronger bullish sign appears—a positive divergence of Force Index. It makes a more shallow second low, even as prices continue to pound their lows, below 39. The rally following the decline is very sharp, turning up both EMAs at the right edge of the chart—another bullish sign. Entry Ratings WEEKLY CHART A—Uptick of MACD-Histogram: 1 point A—Uptrend confirmed by the rising EMAs: 1 point DAILY CHART A—Bullish divergence of Force Index: 1 point B—Rising EMAs: 1 point DECISION Go long BVF near the fast EMA, with a stop below the week’s low, and observe money management rules: 3 points. PASS POINT 5 A B
194 CASE STUDIES Trade 8: Biovail Corporation BVF—Exit Answer Chart A8-c entry long A B C D E F G BVF shoots out of the gate in September and runs until it reaches the upper channel line, the profit-taking area, while Force Index traces a bearish divergence in area A. Notice a less distinct divergence a few days earlier. When a beginning trader faces such a pattern, he is better off taking profits early, while a more experienced trader may elect to hold. An important early step in a trader’s development is learning to take profits without kicking himself for having left some money on the table. Learning to hold for a maximum gain is a skill that is best learned later. Biovail sinks below its slow EMA in area B, offering an opportunity to get long below value. The stock rallies again in area C, and even though that rally never reaches the upper channel line, an extremely high peak of Force Index reveals the power of bulls and calls for higher prices ahead. If you took profits in area C, fine; if you decided to hold, even better, because such extreme peaks of Force Index show that bulls are very strong and higher prices are likely ahead. BVF sinks below its EMAs in area D—notice its repetitive behavior in penetrating the EMA. Once you recognize such a pattern, put your buy
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STUDY GUIDE FOR COME INTO MY TRADIN
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BOOKS BY DR. ALEXANDER ELDER Tradin
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Copyright © 2002 by Dr. Alexander
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vi CONTENTS Part Two Answers and Ra
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HOW THIS BOOK IS ORGANIZED The firs
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QUESTIONS P A R T O N E
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8 QUESTIONS Questions Trial 1 Trial
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10 QUESTIONS Question 4—Stocks, O
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12 QUESTIONS Question 8—Types of
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14 QUESTIONS Questions 9 10 11 12 1
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16 QUESTIONS Question 12—Alcoholi
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18 QUESTIONS Question 16—Discipli
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BASIC CHARTING T H R E E Trading wi
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BASIC CHARTING 23 Question 20—A B
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BASIC CHARTING 25 Question 22—Bas
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F O U R INDICATORS— FIVE BULLETS
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INDICATORS—FIVE BULLETS TO A CLIP
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TRADING F I V E Beginning traders t
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TRADING 41 Question 41—System Tes
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TRADING 43 A. Trend-following B. Os
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TRADING 45 Question 47—Taking Pro
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48 QUESTIONS Questions 48 49 50 51
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50 QUESTIONS Question 51—Opening
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52 QUESTIONS Question 53—The Dail
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56 QUESTIONS Question 56—The Impu
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58 QUESTIONS Question 59—Exits Fi
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60 QUESTIONS Question 62—Trading
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62 QUESTIONS Question 66—Options
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66 QUESTIONS Question 71—The 2% R
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68 QUESTIONS Question 77—The 6% R
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N I N E THE ORGANIZED TRADER If you
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THE ORGANIZED TRADER 73 Question 83
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O N E FINANCIAL TRADING FOR BABES I
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FINANCIAL TRADING FOR BABES IN THE
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FINANCIAL TRADING FOR BABES IN THE
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92 ANSWERS AND RATING SCALES ings w
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94 ANSWERS AND RATING SCALES ten re
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BASIC CHARTING Answer 19 T H R E E
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BASIC CHARTING 99 Give yourself a p
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F O U R INDICATORS— FIVE BULLETS
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TRADING Answer 40 F I V E D. 1, 2,
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TRADING 113 Answer 44 D. 1, 2, 3, a
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DAY-TRADING Answer 48 S I X D. 1, 2
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DAY-TRADING 117 Give yourself a poi
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ADVANCED CONCEPTS Answer 54 1. E 2.
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ADVANCED CONCEPTS 121 At the right
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ADVANCED CONCEPTS 123 Answer 61 1.
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ADVANCED CONCEPTS 125 Give yourself
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MONEY MANAGEMENT Answer 68 E I G H
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MONEY MANAGEMENT 129 staring at a l
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MONEY MANAGEMENT 131 Six precent of
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N I N E THE ORGANIZED TRADER Answer
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THE ORGANIZED TRADER 135 daily, and
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THE ORGANIZED TRADER 137 Answer 93
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THE ORGANIZED TRADER 139 Answer 98
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LET’S TRADE: S E C T I O N CASE S
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Page 208: SOURCES Appel, Gerald. Day-Trading
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