Tap into expert stock trader and passionate fly fisher Dr. Stephen Morris's dynamic trading system that rests on a sound structure of careful analysis and is anchored to a solid foundation.
Morris takes the fundamentals of trading giant Alexander Elder and combines them with his own unique approach to successful trading. Using fly fishing as a metaphor, Morris explores the process that underpins the seasonal matching strategies that are able to exploit any and all market conditions. Throughout the book, Morris illustrates the pyramid structure of success. From time to time, there will be a seesaw between spectacular gains and periods of drawdowns. When supported by a successful trading structure, consistency will win out. When there is consistency, the scales need to be tipped only slightly towards more gains than drawdowns to be successful over the long haul.
Fly Fishing the Stock Market is written for the experienced trader whose trades are already successfully launched from quality trade plans as well as the novice learning the mechanics of entries and exits. If you are looking for a guide that will help you trade with confidence, look no further.
Fly Fishing the Stock Market + Website puts an emphasis on practical application. To that end, this book provides readers with access to a companion website filled with supplementary materials—from Fly Fishing the Stock Market Reports and Instructional Videos to automated Catch and Release software—allowing you to continue to learn in a hands-on fashion long after closing the book.
Introduction xiii
PART I Fly-Fishing Lessons
CHAPTER 1 Three P ’s in a Pod 3
Passion 4
Patience 4
Persistence 4
CHAPTER 2 The Tackle Box 7
What Goes Into the Toolbox 8
Bar Charts and Candlesticks—Same Markets, Different Angles 9
Bullish and Bearish Engulfing Patterns 13
Trendlines 14
Tops 14
Bottoms 19
False Breakouts 20
Gaps 22
Triangles 26
Volume 26
Computerized Indicators 28
Moving Averages 30
Moving Average Convergence-Divergence 32
The Impulse System 39
Force Index 41
Conclusion 41
CHAPTER 3 Developing Your Technique 45
Analytical Tools and Steps 46
Understanding Entry Orders 49
Conclusion 51
CHAPTER 4 Expectations 53
Why Managed Funds Can Be “Dilutional” 54
Conclusion 58
PART II Expect the Unexpected
CHAPTER 5 Seeing Is Not Believing 63
Getting Trapped at the Extreme Edge 64
Conclusion 66
CHAPTER 6 The Art of Deception 69
When the Prey Is Exhausted 70
The Deceptions of V-Bottoms 71
The Deceptions of Symmetrical Triangles 73
The Deceptions of Ascending Triangles 74
The Deceptions of Head-and-Shoulders 77
The Deceptions of Breakouts 78
Conclusion 80
PART III Time to Go FISHing
CHAPTER 7 Fishing Seasons/Market Seasons 83
Market Seasons 83
The Influence of Volatility 85
Monitoring Market Season Changes 86
The Weathervane: A Market Timing Monitor 86
The Weather Station 94
Adding the Detail of Price Patterns to Strengthen the Message 96
Conclusion 99
CHAPTER 8 Matching the Hatch 101
Bottom Patterns 103
Pull-Back Patterns 115
Top Patterns 123
Pull-Up Patterns 130
The Symmetrical Triangle: An All-Around General-Purpose Pattern 136
Conclusion 150
CHAPTER 9 Terrestrials and Cut Banks 153
Fundamental Analysis 154
Using Fundamentals to Complement Technical Analysis 159
A Disconnect Between Technicals and Fundamentals 164
Fundamentals on Fire: Momentum Trading 165
Chasing the Big Ones 168
Conclusion 168
CHAPTER 10 Catch and Release 171
Setting the Hook with the Strike Indicator (Entry) 172
The Strike Indicator Entry Steps 174
Snag Management (Stop-Loss) 177
The Drag System (Trade Management/Profit Exit) 178
Examples of Drag Settings 181
Exit to Enter? 184
Conclusion 187
CHAPTER 11 A Word About Bait Fishing 189
Daily Bait-‘n’-Wait 191
Weekly Bait-‘n’-Wait 191
Monthly Bait-‘n’-Wait 192
Conclusion 193
PART IV Fishing Journal
CHAPTER 12 The Trophy Room 197
Neckline Break . . . Up: 9/28/09 198
The January Effect: 1/5/10 199
A Gem in the Junk Pile: 1/1/10 202
Greater Fool Trade: 4/17/10 204
The Perfect Storm: 2/5/10 207
Time of Possession: 8/14/10 210
W-Bottom: 9/11/10 213
Logical Entry and Exit—Long ENTR: 9/11/10 216
Conclusion 219
CHAPTER 13 The One That Got Away 221
GLF Trade 222
JTX Trade 225
RMBS Trade 227
Conclusion 229
CHAPTER 14 The Structure of Success 231
The Building Blocks Concept 232
Conclusion 246
CONCLUSION 249
APPENDIX A My Trading Journal 251
Value versus Momentum 252
Analysis 252
Group Strength 253
Trading and Position Sizing in Volatile Markets 253
Trade Management 254
Breakouts 256
Taking Profits 256
The Entry/Exit Review 256
Trading Systems 257
Trading Strategies 257
Learning and Progressing 257
APPENDIX B Table of Indicator Sets 259
References 261
About the Author 263
About the Website 265
Index 267
Sirigirl
Posted August 26, 2012
Fantastic book! I loved the fly fishing analogies! This book really
helped me to understand market cycles and patterns and how to best trade
them. Best trading book that I've ever read!
Overview
Tap into expert stock trader and passionate fly fisher Dr. Stephen Morris's dynamic trading system that rests on a sound structure of careful analysis and is anchored to a solid foundation.
Morris takes the fundamentals of trading giant Alexander Elder and combines them with his own unique approach to successful trading. Using fly fishing as a metaphor, Morris explores the process that underpins the seasonal matching strategies that are able to exploit any and all market ...