Technical analysis and the active trader (McGraw-Hill Trader’s Edge Series) - Hardcover

Norden,Gary

Hardcover

ISBN 10: 0071467912 ISBN 13: 9780071467919

Publisher: McGraw-Hill, 2005

Synopsis

Exposing the unreliability of technical analysisTechnical analysis is one of the most widely used and taught methods of financial markets analysis. It is becoming particularly popular with time poor retail traders who are taught that chart patterns, trend lines, indicators etc offer quicker ways to make trading decisions. But how reliable are these methods?
Technical Analysis and the Active Trader exposes the flaws and unreliability of technical analysis. Using examples from real market scenarios, robust independent studies and behavioral finance, technical Analysis and the Active Trader shows how and why traders will struggle to be profitable using charts and indicators.

About this title

About the Author

Gary Norden has been a trader for 25 years and is owner and director of Organic Financial Group, a provider of training materials on trading strategies, risk management, and techniques for successfully trading various financial products. Norden began his full-time trading career at the age of 18, and at the age of 23 was asked by NatWest Markets to run its options trading desk on the London International Financial Futures and Options Exchange (LIFFE). A regular contributor to professional periodicals including Technical Analysis of Stocks & Commodities and Your Trading Edge, he has taught graduate trainees and junior traders at major investment banks and worked as a consultant to investment banks and trading software developers.

From the Back Cover

Go beyond the tired rules of technical analysis to uncover a wider range of profitable opportunities

Technical analysis can be dangerously unreliable, as most technicians will reluctantly attest. Technical Analysis and the Active Trader presents an entirely new approach to the markets, one that combines traditional technical tools with fundamental analysis, behavioral finance, and more to help you understand what makes prices move.

Author Gary Norden is a veteran professional trader, as opposed to a theory-driven mathematician. In Technical Analysis and the Active Trader, Norden examines technical analysis from a trader's perspective to reveal:

• Flaws in bedrock assumptions that form the basis of technical analysis, and strategies you can follow to overcome those flaws
• Findings of modern behavioral finance, and how to use them to gain valuable insights into the decision-making patterns of other traders
• Two trading techniques that will consistently signal when you are about to make a bad decision-and what you need to know to implement each

Decades-old technical analysis strategies are no match for increasingly complex markets and traders. Technical Analysis and the Active Trader shows you how to bolster your program by integrating technical, fundamental, and psychological analysis into a well-rounded investment approach that plays off the strengths of contemporary markets, as opposed to the wishful thinking of obsolete technical analysis.

Improve your trading with this dynamic combination of fundamentals, technicals, behavioral finance, and commonsense

Veteran traders know the perils of relying on easy answers. They know that technical, chart-based indicators and unproven rules of thumb might lead to the occasional lucky call--but they will never lead to long-term market success.

Technical Analysis and the Active Trader introduces you to a powerful trading approach that integrates knowledge of fundamentals and trader psychology with specific technical indicators for a sensible, structurally sound trading program. This eye-opening book breaks through the numerous fallacies of technical analysis to show you how to truly understand markets, companies, and other traders, limiting your risks while giving you a broader sense of which direction markets and traders are likely to head next.

This straightforward rulebook will give you the knowledge you need to uncover lower-risk opportunities and get the most from those opportunities. It reveals strategies that savvy traders use to:

• Scalp or flow trade business entering the market, behaving less like a gambler and more like the “house”
• Use the biases and heuristics of behavioral finance to understand trader psychology and improve your own decision making
• Determine why traders are forecasting a certain outcome, and trade against them if the facts warrant
• Track bond market performance to either support or disconfirm stock market trends
• Determine when good or bad news has already been priced in by traders, and go long or short based on facts instead of hunches
• Link stop loss levels to your preset profit targets as opposed to irrelevant past performance numbers
• Weigh up possible outcomes of a trade, then chose your positions on the side that offers the least resistance to a positive outcome

The majority of technical trading instructors and guides would have you believe that trading is a clear-cut process of unswervingly adhering to rote charts and signals. If that ever worked, it certainly doesn't anymore. Technical Analysis and the Active Trader adapts the traditional claims of chartists and technical analysts to new research and changing realities, showing you how to use all available market data to make informed, intelligent, and profitable trading decisions.

Edition details

• Publisher: McGraw-Hill
• Publication date: 2005
• Language: English
• ISBN 10: 0071467912
• ISBN 13: 9780071467919
• Binding: Hardcover
• Edition number: 1
• Number of pages: 256