Summary and review ofTrading for a Living

Reviewed by Diario de un Inversor · UpdatedJune 13, 2026

Our review

Alexander Elder published this book in 1993 and it remains one of the most complete introductions to professional trading because it addresses what most technical manuals ignore: that markets can be analyzed correctly and money still lost. His most enduring contribution is the Three M system (Mind, Method, Money): trader psychology, analysis system, and risk management are interdependent, and weakness in any one destroys results. Elder devotes a substantial portion to technical analysis — indicators, moving averages, MACD, oscillators — with a level of detail unusual in the literature of the time. The psychology section, however, is the most distinctive: Elder was a psychiatrist before becoming a trader, and that shows in how he describes cycles of euphoria and panic, risk addiction, and the need for a trading journal. The book's limitation is temporal: it was written before the algorithmic era, and some market examples have aged. Even so, the risk management and psychological discipline principles it describes apply to any trading environment.

Key takeaways

• Without psychological discipline, no technical system works consistently over time.
• Risk management (position sizing, stops) determines long-run survival more than win rate does.
• A trading journal is the most underrated tool a professional trader has.
• The market is not the enemy: the trader is, when acting from fear or greed.

Fact

Published in 1993, the book has been revised and updated several times and remains part of trader training programs at numerous financial institutions thirty years after its original publication.