How I Began to Trade
In the summer of 1976, I drove from New York to California. I took along a few books on psychiatry (I was a first-year psychiatric resident), several histories, and put a paperback copy of Engel's How to Buy Stocks into the trunk of my old Dodge. Little did I know that a dog-eared paperback, borrowed from a lawyer friend, would in due time change the course of my life. That friend, incidentally, had a perfect reverse golden touch-any investment he touched went under water. But that's another story.
I gulped down the Engel book in campgrounds across America, finishing it on a Pacific beach in La Jolla. I had known nothing about the stock market, and the idea of making money by thinking gripped me.
I grew up in the Soviet Union in the days when it was, in the words of a former U.S. president, "an evil empire." I hated the Soviet system and wanted to get out, but emigration was forbidden. I entered college at 16, graduated medical school at 22, completed my residency, and then took a job as a ship's doctor. Now I could break free! I jumped the Soviet ship in Abidjan, Ivory Coast.
I ran to the U.S. Embassy through the clogged dusty streets of an African port city, chased by my ex-crewmates. The embassy put me in a "safe house" and then on a plane to New York. I landed at Kennedy Airport in February 1974, arriving from Africa with $25 in my pocket. I spoke some English, but did not know a soul in this country.
I had no idea what stocks, bonds, futures, or options were and sometimes got a queasy feeling just from looking at the American dollar bills in my wallet. In the old country, a handful of them could buy you three years in Siberia.
Reading How to Buy Stocks opened a whole new world for me. When I returned to New York, I bought my first stock-it was KinderCare. A very bad thing happened-I made money on my first trade and then the second one, leaving me with a delusion that making money in the markets was easy. It took me a couple of years to get rid of that notion.
My professional career proceeded on a separate track. I completed a residency in psychiatry at a major university hospital, studied at the New York Psychoanalytic Institute, and served as book editor for the largest psychiatric newspaper in the United States. I still have my license, but my professional practice these days is at most an hour or two per month. I am busy trading, love traveling, and do some teaching.
Learning to trade has been a long journey-with soaring highs and aching lows. In moving forward-or in circles-I repeatedly knocked my head against the wall and ran my trading account into the ground. Each time I returned to a hospital job, put a stake together, read, thought, did more testing, and then started trading again.
My trading slowly improved, but the breakthrough came when I realized that the key to winning was inside my head and not inside a computer. Psychiatry gave me the insight into trading that I will share with you.
From the book
STUDY GUIDE
FOR THE NEW TRADING FOR A LIVING
DR. ALEXANDER ELDER