BiographyRobert R. Prechter, Jr., is founder and president of Elliott Wave International, Robert Prechter has been publishing market commentary since 1976. He began his career with the Merrill Lynch Market Analysis Department in New York.
In 1984, Bob set a record in the options division of the U.S. Trading Championship with a real-money trading account. In December 1989, Financial News Network (now CNBC) named him "Guru of the Decade." Bob served for nine years on the Board of the Market Technicians Association and in 1990-1991 served as its president.
During the 1990s, he expanded his firm to provide analysis for institutions on every major financial market in the world. Bob has written 13 books on finance, most notably the two-volume set, Socionomics – The Science of History and Social Prediction.
His recent title, Conquer the Crash - You Can Survive and Prosper in a Deflationary Depression, was a New York Times and Wall Street Journal business best-seller. In 1999, Bob received the CSTA’s first annual A.J. Frost Memorial Award for Outstanding Contribution to the Development of Technical Analysis. In 2003, Traders Library granted him its Hall of Fame award.
Journals, newspapers, magazines, and newsletters write/edit for:
Robert Prechter edits The Elliott Wave Theorist, a monthly publication that has published since 1979. His articles have also appeared in a number of publications, including the Journal of Psychology and Financial Markets, Futures magazine, Technical Analysis of Stocks & Commodities magazine, Barron's and The New York Times.
Books by Robert Prechter
You need an objectively definable method of financial market analysis. It must be thought out in its entirety to the extent that if someone asks you how you make your decisions, you can explain it to him, and if he asks you again in six months, he will receive the same answer. This is not to say that a method cannot be altered or improved; it must, however, be developed as a totality before it is implemented.
A prerequisite for obtaining a method is acceptance of the fact that perfection is not achievable. People who demand it are wasting their time searching for the Holy Grail, and they will never get beyond this first step of obtaining a method. I chose to use an approach called the Wave Principle, which I think reveals the true pattern of market behavior. But there are a hundred other methods that will work if successful trading is your only goal.
Paper trading is useful for the testing of methodology, but it is of no value in learning about trading. In fact, it can be detrimental in imbuing the novice with a false sense of security. A novice may have successfully paper traded over the past six months and thus believe that the next six months with real money will be no different. In fact, nothing could be further from the truth. Why? Because the markets are not merely an intellectual exercise. They are an emotional challenge as well.
When trading, you must conquer a host of problems, most of them related to your own inner strength in battling powerful human emotions. The School of Hard Knocks is the only school that will teach it to you, and the tuition is expensive. There is only one shortcut to obtaining experience, and that is to find a mentor. Locate and learn from someone who has proved himself over the years to be a successful trader or investor - but they are hard to find.
The mental strength to accept that losses are part of the game.
There are many denials of reality that automatically disqualify millions of people from joining the ranks of successful speculators. For instance, to moan that 'manipulators', 'insiders', 'program trading' or anything else is to blame for one's losses is a common fault. Anyone who utters such a conviction is doomed before he starts. The biggest obstacle to successful speculation is the failure to accept the simple fact that losses are part of the game, and that they must be accommodated.
Practically speaking, you must employ an objective money management system when formulating your trading method. There are many ways to do it. Some methods use stops. I think a better approach is us commit only a small percentage of your available capital on each trade and let your analytical method dictate your action. After all is said and done, learning to handle losses will be your greatest triumph.Taken from The Global-Investor Book of Investing Rules