Financial Risk Taking: An Introduction to the Psychology of Trading and Behavioural Finance

ISBN-13: 9780470850268 / Angielski / Twarda / 2004 / 294 str.

Mike Elvin

Opis

In Financial Risk Taking, trader and psychologist Mike Elvin explores the complex relationship between human behaviour patterns and the markets, offering the reader a context in which to assess their own strengths and weaknesses as investors. The book offers an apposite and uncomplicated system of skills development in the form of competences and competencies that can be applied anywhere along the continuum from casual investor to full-time day trader. Elvin presents a Comprehensive Model of Trading Competence (the MOT) as well as the concepts of analysis and refutation, the paramouncy principle, and self-sabotaging behaviours such as the Santa Claus syndrome and Bohica effect. Areas covered include:

• Emotions - are they functional or disabling? How do the mechanisms of fear, greed and panic work?
• Motivation and perception - how do belief paradigms affect perception and performance?
• What perceptual errors influence decisions to the trader's detriment?
• Information processing and risk assessment - how does information overload affect Stress How does stress affect investment decisions?
• Technological and mathematical anxiety - why do we avoid learning the skills we most need? What levels of ability are required?
• Can psychological and biological theories assist in our understanding of investors' performance?

Spis treści

List of Figures.

Foreword.

Contrarian Investment Strategies.

Acknowledgements.

1. Introduction: Between Scylla and Charybdis.

2. Understanding Trading Competence.

3. A Comprehensive Model of Trading Competence.

Part A: The Tactical Model of Trading Competence.

Part B: The Strategic Model of Trading Competence.

4. Taming Stress to Become a Better Trader.

5. The Psychology of Perceptual Bias.

6. Emotions, Emotional Intelligence, and the Trader.

7. Martial Arts and Budo Zen – Controlling Fear and Self–Sabotage.

8. Standards and Criteria for Trading Competence.

Appendix 1: Reading List.

Appendix 2: Websites of Interest.

Appendix 3: Courses and Seminars.

Bibliography.

Index.

O autorze

Mike Elvin graduated in Psychology from the University of Sussex and subsequently received a scholarship from the Home Office to write a thesis at the University of Kent at Canterbury. He was employed as a psychologist by the renowned Professor RG Andry, at the University of London, undertaking research and practice in psychiatric therapeutic communities.

For some years, D. Elvin managed Community Mental Health Services in London, UK, and was seconded to the University of Kingston Business School to study Business Administration. At that time, he was trading stocks and shares part time with considerable success. He resigned his management post o undertake employment as a full–time trader and to develop trading systems with Tom Williams at Genie Software Ltd. Dr. Elvin teaches and writes on the psychology of trading, behavioural finance, and technical analysis giving individual tuition and seminars. He wrote Financial Risk Taking following research over eight years, which included interviewing home and professional traders, mainly in the UK. He holds approved status as an expert witness in Sweet and Maxwell’s Law Directory of Experts and is developing a diploma course for traders in the UK.

Blurb

Financial Risk Taking explores the complex relationship between human behaviour and the markets, offering the reader a context in which to assess their own strengths and weaknesses.  It is essential reading for anyone wishing to invest in stocks and trade futures as part of a Self–Investment Pension or day trading business.  Following years of trading and careful research the author has developed the comprehensive Model of Trading Competence that depicts the competences and competencies required to succeed.

The book embraces some controversial issues and introduces the concepts of:

• Perceptual Errors – how these negatively influence the trading process and how to overcome them through applying techniques such as analysis and refutation.
• Emotions – are they enabling or disabling in the investment/trading forum? Research showing that they are indispensible to the decision processes in trading and everyday life is discussed.
• The Paramouncy Principle – demonstrates that you are the most importan t variable in the trading equation.
• Self–Sabotaging Behaviours – what they are and how to overcome them.
• Loss and Success Depression – what are success and failure|? How to overcome feeling of hopelessness if it all goes wrong.
• Stress – what it is and how to ameliorate its negative effects.

Eight Standards with relevant criteria are presented in the final chapter in the style of a work–book for readers and students to structure their personal learning.