Behavioral finance. N. Rudyk

Many novice traders do not pay enough attention to the role of finance in stock trading.

Trying to read only books about Forex and ignoring works on finance. They make the mistake of relying solely on indicator signals, reading news feeds, or monitoring previously identified patterns.

While it is knowledge of finance that helps to achieve better results in long-term investing.

At the same time, it is not at all necessary to be a doctor of science in this matter; to work, it is quite enough to study the basics and use the acquired knowledge when analyzing reporting.

At the same time, there are many pitfalls in this issue; companies often deceive potential investors by distorting reports.

The book “Behavioral Finance” will help you learn to identify deception and avoid these very pitfalls.

In addition, it perfectly describes how the available information should be perceived.

Summary:

1. About what we should do, what we actually do and what we should have done - how to correctly conduct analysis and build forecasts based on the results obtained.
2. About optimists and their friends who, as a rule, are only strong in hindsight - or how overestimating one’s strengths can lead to disastrous results.
3. Trading can be dangerous to your health - the relationship between the character of an investor and the profitability of his work.
4. About how easily one can be cursed - the main factors that form the price of the proposed asset.
5. About the harm of stereotypes - statistics and its impact on making forecasts.
6. About desires and their consequences - how dangerous it is to wishful thinking when assessing the prospects of an asset.
7. About some abnormal reactions - are shares so good if the company that issued them has a good reputation?
8. We explore certainty, probability and possibility about what is promising and what is not so promising.
9. About timid managers - about how corporate managers realistically assess the degree of existing risk.
10. How and what some people get into - projects that are easier to close than to continue spending money on them.
11. About one unhealthy predisposition - the influence of character and habits on a trader’s working style.
12. Practitioners, theorists and one blind monkey - is there a relationship between the theory of financial markets and the theory of finance.
13. On efficiency - the classical theory of an efficient stock market.
14. A few words about what Robert discovered - Robert Shiller's research on the efficiency of markets.
15. Noise – the theory of noise trading, irrational actions of investors, examples of the use of some theories.

Overall, the book is quite interesting; it uses vivid examples and non-standard approaches to assessing the market situation.

At the same time, it is more suitable for a professional investor than for a beginner in stock trading. Download Behavioral Finance