The last eleven years have witnessed three traumatic events in the global financial markets: the equity crash of 1987, the bond crash of 1994, and the more recent currency crisis in Asia. In the technologically-advanced and sophisticated world of the financial market place, why do such catastrophes happen? In FORECASTING FINANCIAL MARKETS, Tony Plummer provides a compelling insight into the psychology of trading behavior and shows how the herd instinct in decision-making cab have disastrous results. The ability to make money n markets, he stresses, depends critically on an individuals ability to make decisions independently of the crowd. To attain such independence the investor or trader must acquire three interrelated skills: the ability to understand the forces at work in logical terms
the ability to recognize their own emotional responses to market fluctuations - and override them
the ability to design an investment process or trading system that generates objective buy and sell signals. This latest edition of FORECASTING FINANCIAL MARKETS has been completely updated to take account of new ideas generated by the author and the scientific community. New chapters included deal with:
original insights into the cause of market reversals
the critical role of energy gaps in creating market oscillations and how to recognize these energy gaps
the role of information flows in market activity and the importance of distinguishing between different types of information
the application of leading-edge research into human motivation
the presence of a sensitive area in the human psyche, which makes traders vulnerable to making mistakes and how to deal with this problem.
