Financial Risk Taking

Mike Elvin

• 15 juni 2004
• 9780470850268

Samenvatting:

Financial Risk Taking offers readers a context within which to assess their own strengths and weaknesses as investors. * Explains an apposite and uncomplicated system of skills development in the form of competences and competencies that can be applied anywhere along the continuum from casual investor to full--time day trader.

Financial Risk Taking explores the complex relationship between human behaviour and the markets, offering the reader a context in which to assess their own strengths and weaknesses. It is essential reading for anyone wishing to invest in stocks and trade futures as part of a Self-Investment Pension or day trading business. Following years of trading and careful research the author has developed the comprehensive Model of Trading Competence that depicts the competences and competencies required to succeed.

The book embraces some controversial issues and introduces the concepts of:

• Perceptual Errors - how these negatively influence the trading process and how to overcome them through applying techniques such as analysis and refutation.
• Emotions - are they enabling or disabling in the investment/trading forum? Research showing that they are indispensible to the decision processes in trading and everyday life is discussed.
• The Paramouncy Principle - demonstrates that you are the most importan t variable in the trading equation.
• Self-Sabotaging Behaviours - what they are and how to overcome them.
• Loss and Success Depression - what are success and failure
  
  ? How to overcome feeling of hopelessness if it all goes wrong.
• Stress - what it is and how to ameliorate its negative effects.

Eight Standards with relevant criteria are presented in the final chapter in the style of a work-book for readers and students to structure their personal learning.

In Financial Risk Taking, trader and psychologist Mike Elvin explores the complex relationship between human behaviour patterns and the markets, offering the reader a context in which to assess their own strengths and weaknesses as investors. The book offers an apposite and uncomplicated system of skills development in the form of competences and competencies that can be applied anywhere along the continuum from casual investor to full-time day trader. Elvin presents a Comprehensive Model of Trading Competence (the MOT) as well as the concepts of analysis and refutation, the paramouncy principle, and self-sabotaging behaviours such as the Santa Claus syndrome and Bohica effect.

Areas covered include:

• Emotions - are they functional or disabling? How do the mechanisms of fear, greed and panic work?
• Motivation and perception - how do belief paradigms affect perception and performance?
• What perceptual errors influence decisions to the trader's detriment?
• Information processing and risk assessment - how does information overload affect Stress How does stress affect investment decisions?
• Technological and mathematical anxiety - why do we avoid learning the skills we most need? What levels of ability are required?
• Can psychological and biological theories assist in our understanding of investors' performance?