Corey Rosenbloom - The Complete Trading Course: Price Patterns, Strategies, Setups, and Execution Tactics

Contents

The Complete
Trading Course

Founded in 1807, John Wiley & Sons is the oldest independent publishing company in the United States. With offices in North America, Europe, Australia and Asia, Wiley is globally committed to developing and marketing print and electronic products and services for our customers' professional and personal knowledge and understanding.

The Wiley Trading series features books by traders who have survived the market's ever changing temperament and have prosperedsome by reinventing systems, others by getting back to basics. Whether a novice trader, professional or somewhere in-between, these books will provide the advice and strategies needed to prosper today and well into the future.

For a list of available titles, please visit our Web site at www.WileyFinance.com .

Copyright 2011 by Corey Rosenbloom. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the Web at www.copyright.com . Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permissions .

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) 762-2974, outside the United States at (317) 572-3993 or fax (317) 572-4002.

Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. For more information about Wiley products, visit our web site at www.wiley.com .

Library of Congress Cataloging-in-Publication Data:

Rosenbloom, Corey.
The complete trading course : price patterns, strategies, set-ups, and execution / Corey Rosenbloom.
p. cm. (Wiley trading series)
Includes bibliographical references and index.
ISBN 978-0-470-59459-9 (cloth); ISBN 978-0-470-94729-6 (ebk); ISBN 978-0-470-94728-9 (ebk);
ISBN 978-0-470-94727-2 (ebk)
1. Technical analysis (Investment analysis) 2. Investment analysis. 3. Stocks. 4. Speculation. I. Title.
HG4529.R67 2011
332.632042dc22
2010032311

To my parents, George and Debby, for without the life-long support, encouragement, and life-lessons you both taught me, none of this would be remotely possible.

Preface

When you first look at a stock chart as an opportunity to make money, where do you start? How do you classify all the conflicting signals , cut through the noise, and get straight to the point of what matters most? How do you structure your analysis? And when you find what you think could be a trading opportunity, how do you enter, manage, and exit the trade most efficiently?

The Complete Trading Course answers these common questions of traders from all experience levels and provides you a specific pathway for analyzing your chart to find specific trading opportunities. These opportunities are built on time-tested price principles that winning traders have used for many years, but have been buried under the information overload of today's high-speed, indicator-driven markets. Building from a foundation of price principles that guide your analysis, the book then overlays specific strategies onto the developing structure from insights in candlestick charts (showing not just the pattern, but how the pattern forms and its importance in assessing turns in price), price patterns, and Fibonacci retracements, all of which fit into the specific context of the life cycle of a price move on any timeframe. Knowing where the chart exists in the life cycle of a price move reveals what strategies are most effective and what indicators reveal the best setups, which guide your specific decisions on where to enter, place stops, play for a specific price target, or hold for a larger gain as you monitor open positions as new data emerges on the chart in real time.

Knowing how to identify trades based on price trend, momentum, and volatility are all foundation concepts which are covered in detail in the first part of the book. The section on edge reveals specifics of trade execution tactics geared to your unique personality, which is not covered in most trading books that reveal buy here, sell there strategies that do not take into account the unique experiences and personality of the trader putting on the position. If you do not understand why you are entering a trade, you will almost certainly not be successful in that trade, as you will lack the confidence and edge necessary to recognize a proper opportunity, manage it in real time, and exit the position properly without emotion negatively affecting your decision. This book specifically addresses the importance of combining objective chart information with your understanding and experience; as such, the confidence you have in your strategies and methods will combat the natural tendency to enter when you feel most confident and exit when you feel the most pain, both of which allow emotions to erode your accuracy and monetary trading edge.

I wrote this book from my combined experience and education as a Chartered Market Technician and trader of many markets and strategies; I wish this book had existed when I began my journey as a trader, as it would have saved me countless hours of wasted time and effort. What separates today's traders from those 50 years ago is the sheer amount of information, webinars, seminars, books, courses, blogs, web sites, ebooks, and so on that inundate the new trader with too much information, and too many voices saying their methods are the best. Lured by the promise of instant riches, a new trader buys a new indicator or attends a single expensive seminar, only to find the information too complicated to apply, or worse, absolutely ineffective in a real-time, fast-paced trading environment.

No one book, indicator, or seminar can teach you all you need to know to be a successful trader. Instead, your goal should be to learn foundation price principles, effective strategies, how to assess your edge, and then incorporate your unique personality, experiences, stage in life, risk-tolerance, and individual psychological make-up into a lifetime of learning, starting with the basics and building a unique creation from there as you progress month to month and then year to year as a developing trader. Trading is a performance discipline, not unlike the training and commitment required to become a professional athlete, physician, scientist, or musician. All professionals must start with the basic, time-tested principles of their respective disciplines, and then carve out their own specialty with the information they have learned and the methods that appeal to themor speak to them as it has been said. Some methods will speak to you while others will not; learn more about trading methods that call to you and interest you as you develop as a trader. This book lays the basic foundation upon which to build a life-long trading career.