|  AUG 1988

Kroll on futures trading strategy by Dr. Alexander Elder

Kroll on futures trading strategy by Dr. Alexander Elder Author: Stanley Kroll Publisher: Dow Jones-Irwin 1818 Ridge Road Homewood, IL 60430 Contents: 203 pages, hardbound Price: $29.95 Stanley Kroll is reputed to have taken seven-figure profits out of the inflationary markets of the 1970s. He also wrote two good market books in those days: The Commodity Futures Market Guide (with Irwin Shishko) and The Professional Commodity Trader. Kroll spent the next several years traveling in Europe and writing books on sailing. He returned to the U.S. and the futures markets in the mid-1980s. A number of important points covered in Kroll's earlier works are repeated in his new book: identify the long-term trend and trade only in its direction; don't overcomplicate your system; follow technical factors rather than fundamentals; focus on trend-following rather than predicting; etc., etc. Kroll also makes several good observations on the psychology of trading. He describes a ""potent adrenaline rush of fear"" when you are caught on the losing side of a trade. He shows how a trader's mind becomes clouded by emotion, making real-time trading more treacherous than paper trading. The book reprints many long-term weekly continuation charts which confirm the importance of long-term market outlook. Kroll advises patience and quotes his hero, Jesse Livermore, as saying: ""Big profits are made by sitting,"" and ""Once a major trend develops, it tends to pick up momentum, increasingly feeding on its own strength or weakness,"" and ""Trying to pick off tops or bottoms against strongly entrenched price trends is invariable dangerous to one's financial health.""

by Alexander Elder, MD