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    Two Roads Diverged: Trading Divergences
    Two Roads Diverged: Trading Divergences
    Two Roads Diverged: Trading Divergences
    Ebook70 pages40 minutes

    Two Roads Diverged: Trading Divergences

    By Dr Alexander Elder

    4/5

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    About this ebook

    Two Roads Diverged: Trading Divergences

    What you see on the surface is often deceptive, in trading, as well as in life. A trend may appear strong, while below the surface it may be weak and ready to reverse.

    This book will teach you to use indicators for measuring the internal power of trends. When they confirm an uptrend, they tell you it's OK to hold or add to long positions. At other times they signal that the trend is suspect: it is better to exit, take profits, and even consider switching from long to short or vice versa.

    A divergence is a disagreement between the patterns of indicators and prices. You'll find bullish divergences near market bottoms and bearish divergences near market tops. Some traders use these important terms loosely; this book will make them very clear by guiding you through several Reader Exercises. It will show you how to ride price trends with greater confidence and recognize upcoming reversals before they hit the crowd.

    CONTENTS

    How to Work with This Book
    Free Updates & the Honor Code
    Review of Tools
    A Bullish Divergence: A Basic Definition
    What is NOT a Bullish Divergence
    A Bearish Divergence: A Basic Definition
    What is NOT a Bearish Divergence
    Reader Exercises
    Entries, Stops, and Profit Targets
    Additional Points on Divergences
    Divergences in Other Indicators
    Divergences in Multiple Timeframes
    Scanning for Divergences
    The Next Step: MACD Semi-Automatic
    Conclusion
    Thanks
    Sources
    About the Author

    Alexander Elder, M.D. is a professional trader based in New York. He is the author of several best-selling books: Trading for a Living, Come into My Trading Room, Entries & Exits, and The New Sell and Sell Short (all with Study Guides). Dr. Elder taught psychiatry at Columbia University. His experience provides him with unique insight into the psychology of trading. Dr. Elder is a sought-after speaker at worldwide conferences. He is a co-director of SpikeTrade, a website for traders.

    LanguageEnglish
    PublisherDr Alexander Elder
    Release dateJan 8, 2012
    ISBN9781452476988
    Two Roads Diverged: Trading Divergences
    Author

    Dr Alexander Elder

    Dr. Alexander Elder is a professional trader based in New York City. He is the author of Come into My Trading Room (Barron's 2002 Book of the Year) and Trading for a Living, considered modern classics among traders, as well as a number of other books. Dr. Elder was born in Leningrad and grew up in Estonia, where he entered medical school at the age of 16. At 23, while working as a ship's doctor, he jumped a Soviet ship in Africa and received political asylum in the United States. He worked as a psychiatrist in New York City and taught at Columbia University. His experience as a psychiatrist provided him with unique insight into the psychology of trading. Dr. Elder's books, articles, and software reviews have established him as one of today's leading experts on trading. Dr. Elder is the originator of Traders' Camps—week-long classes for traders, as well as the Spike group. Group members are professional and semi-professional traders who share their best stock picks each week in competition for prizes among themselves. He continues to trade and is a sought-after speaker at conferences in the US and abroad.

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    Reviews for Two Roads Diverged

    4/5

    24 ratings4 reviews

    What our readers think

    Readers find this title to be an interesting and promising tool for trading. It provides great insight and is an easy read for beginners. While it may not be suitable for traders who prefer trend following, it is still considered a good book by many. Thank the author for the valuable knowledge shared.

    What did you think?

    Tap to rate

    Review must be at least 10 words

    • 4/5
      Making the rules of divergence clear to ensure more profitable trades
    • 5/5
      great insight from Dr. Elder. Good and easy read for beginners
    • 3/5
      Interesting. One more tool to the trading arsenal; and looks a good and promising one.
    • 5/5
      good knowledge for beginer traders. this book is really suitable for traders who love trading reversal or counter-trend trading. From my opinion, i will not use this tool in my trading system as i want to follow the trend rather trader against it.
      By the way, it's a good book. Thank the author!

    Book preview

    Two Roads Diverged - Dr Alexander Elder

    Two Roads Diverged: Trading Divergences

    Elder.com e-book Series

    Dr. Alexander Elder

    Copyright 2012 by Dr. Alexander Elder

    ISBN: 978-1-4524-7698-8

    Smashwords Edition

    Published by elder.com

    Two roads diverged in a wood, and I—

    I took the one less traveled by,

    And that has made all the difference.

    Robert Frost (1874 – 1963)

    DEAR READER: electronic publishing is still in its infancy. If the fonts do not to look right on your screen, try printing out this e-book – it will look fine on paper. Also, if you have any suggestions on improving or updating this book, please write to the author at [email protected]

    LEGAL: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means without the prior written permission of the copyright owner.

    Disclaimer of warranty: while the author has used his best efforts in preparing this book, he makes no representations or warranties in respect to the accuracy or completeness of the contents. The advice and strategies contained herein may not be appropriate for your situation. You should consult with a professional where appropriate. The author shall not be responsible for any loss.

    Last revised: January 2012

    Books by Dr. Alexander Elder

    Trading for a Living

    Study Guide for Trading for a Living

    Rubles to Dollars

    Come into My Trading Room

    Study Guide for Come into My Trading Room

    Straying from the Flock

    Entries & Exits: Visits to 16 Trading Rooms

    Study Guide for Entries & Exits

    The New Sell & Sell Short (with Study Guide)

    To Trade or Not to Trade: A Beginner’s Guide (e-book)

    Table of Contents

    How to Work with This Book

    Free Updates & the Honor Code

    Review of Tools

    A Bullish Divergence: A Basic Definition

    What is NOT a Bullish Divergence

    A Bearish Divergence: A Basic Definition

    What is NOT a Bearish Divergence

    Reader Exercises

    Entries, Stops, and Profit Targets

    Additional Points on Divergences

    Divergences in Other Indicators

    Divergences in Multiple Timeframes

    Scanning for Divergences

    The Next Step: MACD Semi-Automatic

    Conclusion

    Thanks

    Sources

    About the Author

    To find the truth, look below the surface!

    What you see on the surface is often deceptive – in trading, as well as in life. A trend may appear strong, while below the surface it may be weak and ready to reverse.

    We have indicators that measure the internal power of a trend. At times they confirm an uptrend and tell you it’s OK to hold or add to your positions. At other times they signal that the trend is suspect: it is better to exit, take profits, and even consider switching from long to short or vice versa.

    A divergence is a disagreement between the patterns of indicators and prices. We find bullish divergences near market bottoms and bearish divergences near market tops. Many traders use these words very loosely – I want to make these important terms very clear. The purpose of this book is to help you ride price trends with greater confidence and recognize upcoming reversals before they hit the crowd.

    Needless to say, I hold no monopoly on wisdom. I’ve learned my craft from those who went before me and still consider myself a student in the graduate school of

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