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Behavioural Technical Analysis: An introduction to behavioural finance and its role in technical analysis
'Behavioural Technical Analysis' is an accessible introductory guide to how human nature impacts the markets and those who trade in them.
At its core, trading is a decision-making process based on the analysis of data and a judgement on risk and uncertainty. When humans make trading decisions their emotions, physiology and the natural qualities of the brain automatically and subconsciously play a role. Therefore, to better understand the financial markets we need to better understand the behaviour of individual investors within those markets.
Behavioural finance - the study of how human sentiment and emotion affects financial decision-making - is a means for achieving this better understanding and it is already revolutionising investment and trading. In particular, it is becoming clear that behavioural finance can help evaluate various aspects of technical analysis - and this is the unique focus of 'Behavioural Technical Analysis'.
This book provides an introduction to the six main areas of behavioural dealing with complexity; how humans perceive what is around them; sense of self; aversion to risk; the impact of society and crowds; and gender. An overview is given in each case and for each key concept details are provided about how it can affect the work of technical analysts.
The author then builds on these early chapters by applying the concepts of behavioural finance to three key technical analysis study of extremes, study of trends, and support and resistance. It is shown how behavioural finance can help illuminate long observed technical price patterns and thus serve as a foundation for profitable investment and trading strategies.
This book does not presuppose any knowledge of behavioural finance or psychology, skills in mathematics or detailed trading techniques, but instead provides an outline of the key features of behavioural finance that are relevant to technical analysis and advances a new and exciting way of thinking about trading.
'Behavioural Technical Analysis' is a lucid and practical read for all those who want to understand what happens when human nature and financial markets collide - and, most importantly, how to profit from it.
At its core, trading is a decision-making process based on the analysis of data and a judgement on risk and uncertainty. When humans make trading decisions their emotions, physiology and the natural qualities of the brain automatically and subconsciously play a role. Therefore, to better understand the financial markets we need to better understand the behaviour of individual investors within those markets.
Behavioural finance - the study of how human sentiment and emotion affects financial decision-making - is a means for achieving this better understanding and it is already revolutionising investment and trading. In particular, it is becoming clear that behavioural finance can help evaluate various aspects of technical analysis - and this is the unique focus of 'Behavioural Technical Analysis'.
This book provides an introduction to the six main areas of behavioural dealing with complexity; how humans perceive what is around them; sense of self; aversion to risk; the impact of society and crowds; and gender. An overview is given in each case and for each key concept details are provided about how it can affect the work of technical analysts.
The author then builds on these early chapters by applying the concepts of behavioural finance to three key technical analysis study of extremes, study of trends, and support and resistance. It is shown how behavioural finance can help illuminate long observed technical price patterns and thus serve as a foundation for profitable investment and trading strategies.
This book does not presuppose any knowledge of behavioural finance or psychology, skills in mathematics or detailed trading techniques, but instead provides an outline of the key features of behavioural finance that are relevant to technical analysis and advances a new and exciting way of thinking about trading.
'Behavioural Technical Analysis' is a lucid and practical read for all those who want to understand what happens when human nature and financial markets collide - and, most importantly, how to profit from it.
- GenresFinance
216 pages, Paperback
First published May 20, 2010
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Displaying 1 - 2 of 2 reviews
September 12, 2014
I was hoping the author was going to make less-than-superstituous connections between behavioural finance & technical analysis. Bummer.
June 28, 2011
If you are interested in learning about behavioral finance theories, you will enjoy this book. If you are looking for something that will improve your ability to analyze charts, look elsewhere.
This is a good book, but its focus is overwhelmingly on why investors buy, sell or hold. Azzopardi explains why investors often do not act in a rational manner and instead reject reality or base a stock's value on a prior price. He deserves credit for discussing theory in a way that is applicable to the financial markets. You'll walk away being more aware of the mistakes you've probably made.
Azzopardi does show how behavioral concepts result in temporary lower (support) and upper (resistance) price limits for stocks, but does not go much detail about technical analysis. So, if you set your expectations accordingly, you'll find this to be a worthy read.
This is a good book, but its focus is overwhelmingly on why investors buy, sell or hold. Azzopardi explains why investors often do not act in a rational manner and instead reject reality or base a stock's value on a prior price. He deserves credit for discussing theory in a way that is applicable to the financial markets. You'll walk away being more aware of the mistakes you've probably made.
Azzopardi does show how behavioral concepts result in temporary lower (support) and upper (resistance) price limits for stocks, but does not go much detail about technical analysis. So, if you set your expectations accordingly, you'll find this to be a worthy read.
Displaying 1 - 2 of 2 reviews