Michael Gross interviews Dr. Alexander Elder on Trading Psychology




Michael Gross interviews Dr. Alexander Elder on Trading Psychology

Key Excerpts from Michael Gross’s 2016 interview with Dr. Alexander Elder on Markets, Trading Psychology and the strategy of Selling Options.

Michael Gross: Okay, to everybody listening to today’s Option Seller’s Guest Series, we have a very special guest for you today. I am speaking with Dr. Alexander Elder. For those of you who may not be familiar with Dr. Elder, you should be. He is a legend in the trading world. He has two classic books: “At Least Trading for a Living” and “Come into my Trading Room”, which I feel should be staples of anybody who’s considering becoming a serious trader. Dr. Elder, welcome to the show today!

Dr. Elder: Thank you very much! Pleasure being here.

Gross: Dr. Elder, we’re going to start. Obviously, our readers and listeners here sell options: some of them sell index options; some of them sell stock options. Obviously, here we talk about selling commodities options but I think it might be interesting to a lot of our listeners and readers to hear your story. You have a very interesting story about how you got to this country and how you got started in trading and I wonder if you wouldn’t mind sharing that.

Dr. Elder: Well… I was born. Sometimes people ask me, “Where are you from?” I say, “I was born in a non-existent country. I was born in the Union of the Soviet Socialist Republic.” To make a very long story very short, I early on developed a massive hatred of the Soviet system. And I got involved in politics, which was a dangerous business in the old country. And eventually, I realized I didn’t want to go to a Soviet prison so I got a job on a ship and I jumped ship in Africa. I came to the United States. The embassy people – the US embassy people – flew me from Africa to New York. I came to New York with 20 dollars – 18 dollars to my name. And that was my arrival here. I worked.

I took all kinds of exams because back in the old country, I went to medical school, actually graduated medical school, and got my MD at a tender age of 22. So I reconfirmed my diplomas here. I did my residency in New York and got a teaching position at Columbia University. So while all of that was going on, I’m generally a very curious person. I want to know about different things, and I found such a thing called the stock market. Well, that just sounded so exciting. I started reading books and I started gambling.

I mean, of course, I didn’t think of it as gambling at that time but gambling it was. And I had a tiny account, you know – 5000-dollar account. I would run it into the ground, make some more money, open another tiny account, run it into the ground and eventually I learned enough that I stopped running it into the ground. Now, took me years, took me years to overcome that obstacle. And to this day, I’m saying to people that a higher degree of formal education is an obstacle to successful training. The higher your formal education, the more difficult it’s going to be for you to learn how to trade – and there’s a very good reason for that. But once I figured out the game, once I began trading properly, I realized that there hasn’t been a book that properly explained everything I needed. And I wrote a book, I wrote a book that was basically a book I wish I could have bought 5 years earlier. And that was “Trading for a Living”.

It became a huge best seller, an international best-seller translated into 14 languages and still a best-seller in the US for over 20 years. Just last year 2014, I produced a new edition of this book. The publisher was begging for a new edition for ages and I said, Well, I allocated three months to do a new edition. Well, it took me 18 months instead of three. I really completely rewrote the book. And so that’s my book the new “Trading for a Living. That’s… As far as for myself, I trade. I trade professionally. I spend a fair bit of time in front of the screen, mostly trading stocks and commodities. And I also love teaching.

Whenever a company invites me to speak somewhere and pay for it, I am happy to get on a plane. I just came back from Asia. I was teaching almost a week-long course in Macau near Hong Kong. And then I was teaching a very long course in Tokyo. And this was a very wonderful trip. Made new friends, met some old friends, saw some old friends, and here I am back in Vermont which is I am based these days, far from the avenue crowd, with ten-mile views, in front of the live screen and occasionally talking to people like you.
  1. I was not able to understand Dr. Elder’s pronunciation of his site, i.e.

    spicetrade.com or
    spiketrade.com which is correct please

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