Table of Contents
Chapter 1 The Nature of Trading
Different Perspectives of Trading
Market Conditions and Sentiment
Chapter 2 Five Simple Questions
The Market Reacts to the Employment Report
The Market Reacts to the November 2012 Employment Report
How Quickly? CME Group Stock Price
Chapter 3 Fads, Fashions, and Bubbles
Can You Profit from “Bubbles”?
Irrational Speculation and the Limits of Rational Analysis
Chapter 4 Earnings and Corporate Announcements
Anatomy of a Deal: Bank of America and Countrywide Financial
Regulatory Actions and Lawsuits
United Airlines Takes a Nosedive
Political Shocks—Terrorist Actions, Wars, Assassinations, and Policy Actions
The 2000 U.S. Presidential Election
Cooling the Economy and Markets
Trading Lessons from Central Bank Interventions in the FX Market
Chapter 7 Predatory and Insider Trading
Speculative Attacks—“If at First You Don’t Succeed...”
Chapter 8 Crashes, Trading Glitches, and Fat-Finger Trades
October 19, 1987 Stock Market Crash
Trader Errors: “Algos Gone Wild”
Interruptions of Trading on Exchanges
Trading Glitch Case 1: The Tokyo Stock Exchange Suspends Trading
Trading Glitch Case 2.A: The TSE Fails to Cancel Clearly Erroneous Trades
Trading Glitch Case 2.B: The TSE Fails to Cancel Clearly Erroneous Trades
Trading Glitch Case 3: The TSE Suspends Trading
Algorithmic and High-Frequency Trading
The Paradox of Wealth Preservation
Chapter 11 Why Most Traders Lose Money
Failure to Listen to the Market
Confusing Trade Conviction with Trade Retention
Would You Rather Be Right or Rich?
Failure to Have a Viable Trading Game Plan
Failure to Follow a Viable Trading Game Plan
Remaining in a Trade After the Reason for Entering the Trade No Longer Exists
Good Trades That Lose Money Versus Trading Badly
Chapter 12 Developing a Trading Game Plan
Trading Thesis and Trade Identification
Trade Monitoring and Contingency Plan
Trade Completion and Evaluation
The Message in the Behavior of Market Prices
Shocks: Scheduled and Unscheduled
Control Yourself, Because You Can’t Control the Market
Get Prepared to Play, Don’t Play to Prepare
Learn from the Past—Don’t Live in It
There Are No Martyrs in the Market—Only Casualties