Putting money away for the future once meant having a savings account or a stash of bills under the mattress. Those days are long gone. Now concepts such as “investing” and ”trading” surface whenever talk turns to retirement funds or saving for the proverbial rainy day. While some have embraced the art of investing, trading in securities is still a mystery to many. So how does one become versed in the art of trading? With his new book, Strategies for Profiting on Every Trade–Simple Lessons for Mastering the Market, Oliver L. Velez, author, speaker and co-founder of Pristine Capital Holdings Inc., may just have the answer.
As the title implies, this book is all about stock market trading and how to profit from it. Velez does not assume that the reader is already involved in day trading. Instead, his introduction is divided into three parts to help the reader get ready before immersing himself or herself in the actual strategies discussed later.
Part 1 explains various terms, such as “investing,” “day trading” and “online investors.” It also points out some of the tools that you need to trade, such as Internet access with a faster connection than dial-up. Part 2 discusses the importance of time with respect to trading, a notion often overlooked. As the saying goes, “timing is everything,” so it is important to understand that some trades carry a quick turnaround while others develop over time. Part 3 describes that first day of trading—how to understand plays and figure out a trading plan. Velez recommends paper trading initially—meaning no capital is actually invested, but you make decisions and then are shown the consequences of those decisions—until you develop a feel for the real thing.
The main portion of the book is split into seven chapters, each containing lessons in some aspect of trading. Chapter 1 “Lessons on Getting Ready,” for example, explains the concept of compiling a “watch list” instead of trading “blind.” Chapter 2, “Lessons on Some Basics,” explains the fundamentals. It defines a variety of trading terms, such as equity, Treasuries, REITs, munis, futures markets and index funds, and describes different ways to play the market. Chapter 3, “Lessons on Managing,” covers such questions as how much you are prepared to lose in the gamble that a stock you’ve chosen will rebound and what you should do if a trade results in disaster. It emphasizes that knowing your limits is even more important than knowing the risks of trading.
In Chapter 4, “Lessons on Psycho-logy in Trading & Planning,” Velez discusses such issues as fear and discipline; fear may prevent a trader from operating at his or her full potential. “Technical Lessons,” the focus of Chapter 5, discusses what Velez considers the two most common mistakes traders make: shorting (selling) strong stocks or buying weak ones without any particular strategy; and trying to guess when a trend will end. Chapter 6, “Chart Lessons on the Market,” provides tips on how to read the market daily to figure out trends, while Chapter 7 focuses on “Lessons on Classic Patterns.” The Conclusion is a cheat sheet of the book’s main point and is helpful as a quick reference.
Velez does not allow the reader to become overwhelmed. Instead, he breaks up each chapter into numerous subheadings so that it is not necessary to read the entire chapter at once in order to get a sense of the message. Also helpful are the tables and graphs that illustrate the various points. Velez also manages to make his points by using terms for the novice trader instead of peppering the text with industry jargon. In cases where he uses industry terminology, he carefully explains what the terms mean.
Overall, the information provided is invaluable and timely in today’s environment of increasingly popular stock market investing. While there are many uncertainties attached to the movements of the stock market, Velez’s lessons should prove useful no matter how the markets are performing. His advice is not just geared toward up trends, but also includes numerous ideas for when the market plunges or a stock’s up trend ends. With its clear ideas and suggestions, Strategies for Profiting on Every Trade–Simple Lessons for Mastering the Market proves an accessible and helpful aid whether you are a novice or an expert at trading.
Strategies for Profiting on Every Trade–Simple Lessons for Mastering the Market
Author: Oliver L. Velez (with Paul Lange)
Publisher: Marketplace Books Inc.
Publication Date: January 2007
Reviewed By Soroya Brantley