Forecasting Financial Markets: The Psychology of Successful Investing [Hardcover]

"This book will entertain and intrigue keen investors." -- "Financial Times "

A detailed insight into the psychology of trading behaviour and the ways in which the individual can ignore the herd mentality and learn to make effective independent decisions.

The ability to make money in the world's financial markets depends critically on an individual's ability to make decisions independently of the crowd. To attain such independence, the investor or trader must acquire the capacity to understand the forces at work in logical terms, recognize (and neutralize) any emotional responses to market fluctuations, and design an investment process or trading system that generates objective 'buy' or 'sell' signals. This fifth edition has been completely updated to take the author's latest research into account, providing the reader with an in-depth assessment of the phenomenon of cycles, patterns of economic and financial activity, and using cycles as a forecasting tool.

Tony Plummer has worked in the financial markets since 1976, and his experience covers a broad range of financial instruments, from global fixed interest products to foreign exchange markets. He now concentrates on independent research into the patterns and rhythms of global markets, and travels globally to lecture on crowd psychology and technical analysis.

Part One: The logic of non-rational behaviour in financial markets

1 Wholly individual or indivisibly whole

2 Two's a crowd

3 The individual in the crowd

4 The systems approach to crowd behaviour

5 Cycles in the crowd

6 Approaches to forecasting crowd behaviour

Part Two: The dynamics of the bull-bear cycle

7 The stock market crowd

8 The shape of the bull-bear cycle

9 Energy gaps and pro-trend shocks

1 The spiral and the golden ratio

11 The mathematical basis of price movements

12 The shape of things to come

Part Three: Forecasting turning points

13 The phenomenon of cycles

14 The threefold nature of cycles

15 Economic cycles

16 Recurrence in economic and financial activity

17 Integrating the cycles

18 Forecasting with cycles

19 Finding cycles: a case study

2 Price patterns in financial markets

21 The Elliott wave principle

22 Information shocks and corrections

23 The confirmation of buy and sell signals

Part Four: The trader at work

24 The psychology of fear

25 The troubled trader

26 The psychology of success

27 The mechanics of success

28 Summary and conclusions