The Psychology of the Stock Market

THE PSYCHOLOGY OF THE STOCK MARKET: Human Impulses Lead To Speculative Disasters is a brief but fascinating guide about what really influences the way the financial markets behave.<p>Here is the top five principles of the book in summary: <p>1. Your main purpose must be to keep the mind clear and well balanced.Hence do not act hastily on apparently sensational information;do not trade so heavily as to become anxious; and do not permit yourself to be influenced by your position in the market. <p>2. Act on your own own judgement or else act absolutely and entirely on the judgement of anotherregardless of your own opinion.To many cooks spoil the broth. <p>3. When in doubtkeep out of the market. Delays cost less than losses. <p>4. Endeavor to catch the trend of sentiment.Even if you should be temporarily against fundamental conditionsit is nevertheless unprofitable to oppose it. <p>5. The greatest fault of ninety-nine percent out of one hundred active traders is being bullish at high prices and bearish at low prices. Therefore refuse to follow the market beyond what you consider a reasonable climax no matter how large the possible profits that you may appear to be losing by inaction.