forecasting financial markets 6e - plummer 2010

[...]... 367; Basic motivations 367; Avoidance compulsions 368; Response strategies 369; Some awkward personal questions 370; The threat from financial markets 371; Financial markets and personal space 372; Financial markets and the self-image 372; Financial markets and fear 373; The emergence of the crowd 374; Conclusion 374 xii Contents 25 The psychology of success Introduction 377; Basic requirements 377; Goalsetting... three-part mind 362; The psychological matrix 362; Basic personality types 363; Primary behavioural characteristics 364; The gut-oriented personality 365; The heart-oriented personality 366; The head-oriented personality 366; The chink in the ego’s armour 367; Basic motivations 367; Avoidance compulsions 368; Response strategies 369; Some awkward personal questions 370; The threat from financial markets. .. world’s financial markets The fundamental causes of these changes must embrace both the end of fixed exchange rates in the early 1970s and the progressive removal of controls on international financial flows However, whatever the precise reasons may be, the symptoms are evident: ᔡ a very marked increase in the volatility of prices and volumes in most markets; ᔡ sharp and growing clashes between short-term... itself in a three-wave pattern that mirrors the processes of learning, and of energy absorption, in living organisms The crowd, in other words, is not different to other parts of Nature As such, it is intrinsically predictable Forecasting Financial Markets has now come a long way since those initial, exciting discoveries of the 1980s For a start, my research revealed that the archetypal three-wave pattern... terms and the ability to decide what to do in objective terms – are the basis of successful wealth creation in financial markets Further, they enable investors and traders to be detached from the results of each individual investment position in a way that enables 4 Forecasting financial markets them, literally, to enjoy the whole process In this way, wealth creation and personal fulfilment become... only does the price pulse completely validate traditional technical analysis (which incorporates phenomena such as ‘trend lines’ and ‘head-and-shoulders’ reversal patterns), but that it is also the basis of the important ‘Elliott wave principle’ 6 Forecasting financial markets It will be shown that the price pulse is subject both to simple mathematical relationships between its constituent phases and... 1 Introduction Making money by trading in financial markets is a formidable task This is a great truth that is almost impossible for one person to teach to another It can only be realized by the very act of trading Accordingly, very few people enter the trading arena with their eyes fully open to the psychological and financial risks Indeed, they approach markets in the same way that they might approach... and we interpret the world in the light of our own experiences Forecasting Financial Markets is a result of both these truths In 1979, I was forced to learn that the economic theory that I had learnt at the University of Kent and the London School of Economics did not always work in the real world At the time, I was trading in the gilt-edged market in London Prime Minister James Callaghan had been... responsibility introduces a very large non-rational, and emotional, element to behaviour Of course, very few people actually recognize the influence of the crowd because, as the saying goes, ‘fish don’t know that they’re swimming in water’ However, the baleful influence of the crowd permeates all economic and financial behaviour, and is particularly noticeable in financial markets This means that it takes only... behaviour is not random; it is instead both rhythmic and patterned Consequently, it is possible to compare cycle patterns, both over time and between markets, and obtain an extraordinarily accurate perspective on current events xviii Forecasting financial markets This page is intentionally left blank xix Acknowledgements Very few authors can have had their work published without the assistance and encouragement . Cataloging-in-Publication Data Plummer, Tony. Forecasting financial markets : the psychology of successful investing/ Tony Plummer. — 6th ed. p. cm. Includes index. ISBN 97 8-0 -7 49 4-5 63 7-5 1. Stock. personal questions 370; The threat from financial markets 371; Financial markets and personal space 372; Financial markets and the self-image 372; Financial markets and fear 373; The emergence of the. i FORECASTING FINANCIAL MARKETS ii This page is intentionally left blank iii London and Philadelphia FORECASTING FINANCIAL MARKETS THE PSYCHOLOGY OF SUCCESSFUL INVESTING 6th edition TONY PLUMMER