The Psychology of Finance

by Lars Tvede

The Psychology of Finance Lars Tvede The author approaches this fascinating area from the belief that "psychology can be used to explain important aspects of market behaviour, including some aspects of common technical analysis". Without giving too much away, Lars Tvede believes that there is an inherent structure in price movements, depending on the type of stock or market one is investigating. The author's style is very "hands-on", which results in an extremely readable and enjoyable account of the movements in prices of financial assets. Analysts, traders and bankers will find this book essential reading. Economists and the personal investor will also find The Psychology of Finance interesting. Finance/Investment Psychological Aspects

Genres: Psychology, Finance

304 pages, Hardcover

First published January 10, 1991

Reviews

[Victoraleksi · Rating 4 out of 5]

There are countless books on either history of the investment market, or trading psychology, or technical analysis. This book is a rare breed that incorporates several dimensions into one. Chart reading, with elaboration of four basic market rules 1. market is ahead 2. market is irrational 3. environment is chaotic 4. charts are self fulfilling) interrelated with different schools of psychological theories (Behaviorist, Gestalt, Cognitive, Psychoanalysis…)

One great strength of it is that one does not need to know much about psychology to understand what the author tries to tell, because tables of examples are abundant to let you know when you have made specific mistakes. He does not teach you how to correct them, but it does lead the way of self improvement and really help to enlighten your trading style.
It should be in any serious trader's bookshelf for fast recollection of some important trading principles, a regular dosage for cleansing mental dirt accumulated throughout his/her harsh trading life.

Note that this book was published in two editions. The first edition successfully views the mechanics of trading through the emotional filters which affect our buy-sell decisions. The second edition is a complete rewrite which morphs the book into a nebulous psychology text that is only occasionally related to the trading process (or so I have been told to avoid it…)

[Rasmus Nicolaisen · Rating 5 out of 5]

Giver gode redskaber i forhold til fundamental og teknisk analyse.