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Trading Against the Crowd

Author : John F. Summa

Publisher : John Wiley & Sons

Page : 227 pages

File Size : 49,98 MB

Release : 2004-10-27

Category : Business & Economics

ISBN : 0471701017

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Book Description

Efficient market theorists contend that markets are random and thus not predictable. With the publication of Trading Against theCrowd, however, noted author, economist, and professional trader John Summa convincingly shows that investor sentiment can be incorporated into profitable stock and stock market trading systems. In this groundbreaking book, Summa explains how to use popular gauges of crowd psychology, such as put/call ratios, option-implied volatility, short sales, investor surveys, and advisory opinion to trade against, or contrary to, prevailing market sentiment. He also makes compelling arguments against the efficient markets hypothesis with the presentation of his own quantitative weekly bear and bull news-flow intensity indices, which he builds from news scans. This data series, and other popular measures of crowd psychology, are processed through custom indicators that are programmed into profitable trading systems, such as Squeeze Play I & II, Tsunami Sentiment Wave, and the Fourth Estate. Trading Against the Crowd is the first book to provide a comprehensive assessment of investor crowd psychology, offering valuable market timing tools and trading techniques, including: MetaStock and Trade Station system and custom indicator code; comparative statistical studies of CBOE, OEX, and equity-only put/call ratios; straightforward instructions for combining price triggers with sentiment indicators; a practical guide to understanding put/call ratios, short sales, investor surveys, newsletter opinion, and stock market news-flow intensity; how to use LEAP options as trading vehicles to avoid use of stop loss orders; use of put/call ratios for trading the Treasury bond futures market; and test results and evaluation of trading system performance. Many of today’s professional money managers rely on investor sentiment for improved market timing. They know that at extremes of market sentiment, markets tend to be the most predictable.Trading Against the Crowd shows how you can begin to profit from these short- to medium-term sentiment waves generated by the actions of the speculative crowd. Put into practice powerful sentiment data using thoroughly back-tested trading systems, and rise above the herd mentality of the investor crowd, where potentially large profits await.



Trade the Trader

Author : Quint Tatro

Publisher : FT Press

Page : 223 pages

File Size : 17,55 MB

Release : 2010-10-04

Category : Business & Economics

ISBN : 0132101610

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Book Description

When you trade, you're not just trading companies that deliver goods or services. You're trading against other traders who care about only one thing: taking your money. That's the #1 hard reality of trading - and most traders either don't know it, or don't act as if they do. In this book, top trader and hedge fund manager Quint Tatro shows how to win consistently in the "zero sum" game of trading, where there's a loser for every winner. You'll learn how to reflect your trading competition in every facet of trading and investing: choosing companies to invest in, knowing when to jump in and out of the market, and mastering the psychology and gamesmanship of trading. Coverage includes: Understanding the "other side of the trade": the thousands of pros you're trading against. Finding a technical edge with technical analysis you can exploit over and over again. Understanding sentiment and overcoming the human emotions and biases that cost you dearly. Utilizing the most essential strategies of fundamental analysis. Playing positions and probabilities, not P+Ls. Recognizing and capturing huge opportunities in down markets.



Trading on Sentiment

Author : Richard L. Peterson

Publisher : John Wiley & Sons

Page : 317 pages

File Size : 46,21 MB

Release : 2016-03-04

Category : Business & Economics

ISBN : 1119163757

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Book Description

In his debut book on trading psychology, Inside the Investor’s Brain, Richard Peterson demonstrated how managing emotions helps top investors outperform. Now, in Trading on Sentiment, he takes you inside the science of crowd psychology and demonstrates that not only do price patterns exist, but the most predictable ones are rooted in our shared human nature. Peterson’s team developed text analysis engines to mine data - topics, beliefs, and emotions - from social media. Based on that data, they put together a market-neutral social media-based hedge fund that beat the S&P 500 by more than twenty-four percent—through the 2008 financial crisis. In this groundbreaking guide, he shows you how they did it and why it worked. Applying algorithms to social media data opened up an unprecedented world of insight into the elusive patterns of investor sentiment driving repeating market moves. Inside, you gain a privileged look at the media content that moves investors, along with time-tested techniques to make the smart moves—even when it doesn’t feel right. This book digs underneath technicals and fundamentals to explain the primary mover of market prices - the global information flow and how investors react to it. It provides the expert guidance you need to develop a competitive edge, manage risk, and overcome our sometimes-flawed human nature. Learn how traders are using sentiment analysis and statistical tools to extract value from media data in order to: Foresee important price moves using an understanding of how investors process news. Make more profitable investment decisions by identifying when prices are trending, when trends are turning, and when sharp market moves are likely to reverse. Use media sentiment to improve value and momentum investing returns. Avoid the pitfalls of unique price patterns found in commodities, currencies, and during speculative bubbles Trading on Sentiment deepens your understanding of markets and supplies you with the tools and techniques to beat global markets— whether they’re going up, down, or sideways.



The Crowd

Author : Gustave Le Bon

Publisher :

Page : 680 pages

File Size : 29,9 MB

Release : 1897

Category : Crowds

ISBN :

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Book Description



Contrary Investing for the '90s

Author : Richard E. Band

Publisher : St Martins Press

Page : 260 pages

File Size : 34,8 MB

Release : 1989

Category : Business & Economics

ISBN : 9780312038045

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Book Description

Explains how to use the principle of contrary investing to make money in securities, real estate, commodities, currencies, or collectibles, explaining how to use common sense and a knowledge of reliable indicators to make investments



Inefficient Market Theory

Author : Jeffrey C Hood

Publisher : Jeff Hood

Page : 222 pages

File Size : 48,27 MB

Release : 2014-10-08

Category :

ISBN : 9780692273944

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Book Description

Efficient Market Theory is based largely on the concept of crowd wisdom - that a large group of people casting their collective votes in the stock market produces correct stock prices and hence an "efficient market." However, we know from experience that the stock market is not entirely efficient, and sometimes produces wildly incorrect prices. This book explores the various criteria that are required for crowd wisdom to manifest in a financial marketplace, these being: 1) incentives; 2) independence; 3) diversity of opinion; 4) decentralization; 5) knowledge; and 6) rationality. A fundamental premise of this book is that a proper understanding of crowd wisdom criteria, and the ability to detect when these criteria are lacking in the market, is a significant benefit in identifying mispriced securities. In particular, this book explores the various behavioral and psychological biases that affect market participants, what we call the "Foolishness of the Crowd." The predictability of this Foolishness, i.e., the predictability of these biases in a crowd setting such as the stock market, produces reliable offsets from crowd wisdom, i.e., stock mispricings. This book then proposes an investment framework based in part on the investor's "inefficient rationale" - his articulated understanding, based on the above crowd wisdom criteria, as to exactly why the market is mispricing a particular stock. The investment framework also utilizes the wisdom from a select value investing crowd to both identify and help confirm good investment opportunities. The investor who adheres to this investment framework essentially places the full benefit of crowd wisdom and knowledge into his corner, including both the wisdom of the crowd and predictable departures from this wisdom.



Sell and Sell Short

Author : Alexander Elder

Publisher : John Wiley & Sons

Page : 312 pages

File Size : 17,61 MB

Release : 2011-01-06

Category : Business & Economics

ISBN : 1118039351

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Book Description

In Sell and Sell Short, Dr. Alexander Elder examines one of the most overlooked aspects of trading and reveals how you can protect and profit from your trades by exiting them the right way. Throughout the book, he explains how to set profit targets and stop-loss orders prior to entering any trade. He also shares real-world examples that show how to manage your position by adjusting your exit points as a trade unfolds. Along the way, Elder also addresses short selling.



Dark Pools

Author : Scott Patterson

Publisher : Crown Currency

Page : 386 pages

File Size : 12,6 MB

Release : 2012-06-12

Category : Business & Economics

ISBN : 0307887197

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Book Description

A news-breaking account of the global stock market's subterranean battles, Dark Pools portrays the rise of the "bots"--artificially intelligent systems that execute trades in milliseconds and use the cover of darkness to out-maneuver the humans who've created them. In the beginning was Josh Levine, an idealistic programming genius who dreamed of wresting control of the market from the big exchanges that, again and again, gave the giant institutions an advantage over the little guy. Levine created a computerized trading hub named Island where small traders swapped stocks, and over time his invention morphed into a global electronic stock market that sent trillions in capital through a vast jungle of fiber-optic cables. By then, the market that Levine had sought to fix had turned upside down, birthing secretive exchanges called dark pools and a new species of trading machines that could think, and that seemed, ominously, to be slipping the control of their human masters. Dark Pools is the fascinating story of how global markets have been hijacked by trading robots--many so self-directed that humans can't predict what they'll do next.



What I Learned Losing a Million Dollars

Author : Jim Paul

Publisher : Columbia University Press

Page : 192 pages

File Size : 38,86 MB

Release : 2013-05-21

Category : Business & Economics

ISBN : 0231164688

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Book Description

Jim Paul's meteoric rise took him from a small town in Northern Kentucky to governor of the Chicago Mercantile Exchange, yet he lost it all--his fortune, his reputation, and his job--in one fatal attack of excessive economic hubris. In this honest, frank analysis, Paul and Brendan Moynihan revisit the events that led to Paul's disastrous decision and examine the psychological factors behind bad financial practices in several economic sectors. This book--winner of a 2014 Axiom Business Book award gold medal--begins with the unbroken string of successes that helped Paul achieve a jet-setting lifestyle and land a key spot with the Chicago Mercantile Exchange. It then describes the circumstances leading up to Paul's $1.6 million loss and the essential lessons he learned from it--primarily that, although there are as many ways to make money in the markets as there are people participating in them, all losses come from the same few sources. Investors lose money in the markets either because of errors in their analysis or because of psychological barriers preventing the application of analysis. While all analytical methods have some validity and make allowances for instances in which they do not work, psychological factors can keep an investor in a losing position, causing him to abandon one method for another in order to rationalize the decisions already made. Paul and Moynihan's cautionary tale includes strategies for avoiding loss tied to a simple framework for understanding, accepting, and dodging the dangers of investing, trading, and speculating.



Beat the Crowd

Author : Kenneth L. Fisher

Publisher : John Wiley & Sons

Page : 325 pages

File Size : 36,94 MB

Release : 2015-03-30

Category : Business & Economics

ISBN : 1118973054

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Book Description

Train your brain to be a real contrarian and outsmart the crowd Beat the Crowd is the real contrarian’s guide to investing, with comprehensive explanations of how a true contrarian investor thinks and acts – and why it works more often than not. Bestselling author Ken Fisher breaks down the myths and cuts through the noise to present a clear, unvarnished view of timeless market realities, and the ways in which a contrarian approach to investing will outsmart the herd. In true Ken Fisher style, the book explains why the crowd often goes astray—and how you can stay on track. Contrarians understand how headlines really affect the market and which noise and fads they should tune out. Beat the Crowd is a primer to the contrarian strategy, teaching readers simple tricks to think differently and get it right more often than not. Discover the limits of forecasting and how far ahead you should look Learn why political controversy matter less the louder it gets Resurrect long-forgotten, timeless tricks and truths in markets Find out how the contrarian approach makes you right more often than wrong A successful investment strategy requires information, preparation, a little bit of brainpower, and a larger bit of luck. Pursuit of the mythical perfect strategy frequently lands folks in a cacophony of talking heads and twenty-four hour noise, but Beat the Crowd cuts through the mental clutter and collects the pristine pieces of actual value into a tactical approach based on going against the grain.