Trend Trading for a Living, by Thomas Carr is overall a concise but well written book on technical analysis and trading.  It starts off like a late night infomercial con artist sales pitch, but then surprisingly it gets better fast.  Here is an excerpt from the infomercial-like first chapter:


Trend trading is the ideal home-based business.  There is no inventory in warehouses, nothing to ship, no bothersome customers, no cold calling, no gimmicky marketing….  There is no Wal-Mart down the road to undercut your prices.  There are no franchise fees, no staff to employ, no lawyers to keep on retainer….Compared to most other home businesses…trend trading has as low a set of barriers to entry as any business could possibly have.  Profit margins run well over 90 percent.  It’s hard to beat that!

What the author fails to state is that most people who attempt to make a living through trading will fail in their attempts.  The author also fails to recognize that trading is nothing more than a market sum game, and that in order to beat the market, somebody else must be losing their shirts to hand you those free piles of cash.

I was almost ready to give up on the book after the first chapter, but as stated, it does get better fast.  There are many technical analysis books that are immensely more detailed than Trend Trading for a Living.  But where this book shines is in capturing only the most important topics in a concise and well written text.  Part 1 of the book starts off with the infomercial, but moves quickly into the most important technical indicators in chapter 2 – simple moving averages, MACD, Stochastics, On Balance Volume, relative strength index and commodity channel index.  There is also a brief piece on hermeneutics (the author’s doctoral dissertation subject), “the study of how the mind understand and applies the content of written texts”.  The moral of the story is to ignore the news, ignore your personal bias, ignore Jim Cramer, ignore CNBC, and just watch the charts.

Part 2 of the book goes more into the trend trading basics, setting up watch lists, determining market direction, and a good test to practice your own chart reading skills.  Part 3 of the book talks more on how to select stocks to trend.  And the best part in this section is the detailed screening list for each of the technical trend patterns discussed.  For a good “Pullback” criteria list of stocks, search the stockcharts.com screening tool for the following:

  • 60 day simple moving average of volume for today is greater than 500,000
  • 60 day simple moving average of close for today is greater than 15
  • The chart has a bullish engulfing pattern for today
  • 20 day simple moving average of close for today is greater than the 50 day simple moving average for today
  • Daily close for today is less than daily close for five days ago times 1.15


Part 4 of the book provides a good summary of trend trading with stock options, and part 5 of the book unfortunately to much like the infomercial in chapter 1.  Luckily, part 5 is also short enough to be ignored completely, and there is enough worthwhile meat in the book between the first and last chapters to warrant a purchase.

Trend Trading for a Living: Learn the Skills and Gain the Confidence to Trade for a Living
Trend Trading for a Living: Learn the Skills and Gain the Confidence to Trade for a Living by Thomas K. Carr