Successful trading
is ultimately, a mind
game, the outcome as much a result of how you act in pressure
situations as of your trading skills. The hot new field of behavioural
finance focuses on how successful traders and investors act, and react,
during uncertainty and under pressure. This understanding offers an
additional weapon in your trading armoury for making money in the markets. Financial Speculation is a terrific,
widely-hailed work on how you can become a more successful trader by
understanding how your fellow traders are likely to behave in various
situations.
In this
important book, Gerald Ashley gets to the heart of what moves financial
markets. Simple labels,
such as gambling and speculation, don't help us grasp the underlying forces
that drive the markets.
It's far more important to understand the behaviour and biases of the market
players — their actions and motivations are the vital components that drive
everything; bubbles, crashes, huge fortunes, reckless borrowing and complex
instruments and strategies, all flow from this simple fact. How market
players act within their inner selves, and apply their own set of risk and
reward values to the seeming chaos of the market, is absolutely crucial.
The book ranges across all the major
asset classes, looks at past masters of the art, examines modern thinking on
finance and risk, and assesses the value of experts, economists, chartists,
market gurus and analysts. The author draws on a wealth of revealing and instructive market insights,
stories and anecdotes, and uses simple examples to explain how the basic
tools of finance fit together and how to profit in this often complex and
unforgiving landscape.