The Psychology of Technical Analysis: Profiting from Crowd Behavior and the Dynamics of Price

In todays high-tech trading world its sometimes difficult to remember what moves markets. Its not computers fractals or neural networks. Its people - people who make decisions based on their own abilities emotions and financial resources. But people do not make decisions in isolation. They are influenced by friends colleagues and the news media. In the end most individuals become part of a crowd. Thats why so few people make money in the markets; because as every top trader knows the crowd always loses in the end. Winning requires the ability to recognize what the crowd is doing and to do the opposite. If you develop this one ability alone your success in the market is virtually assured. In this completely revised edition of Forecasting Financial Markets - re-titled more aptly The Psychology of Technical Analysis - Tony Plummer demonstrates how to use technical analysis to track crowd psychology and to spot those exciting trades where enormous profits can be made. Using a variety of technical approaches Mr. Plummer shows how prices follow a discernible pattern based on the predictable influence of the crowd. This pattern which Mr. Plummer calls "THE PRICE PULSE" of the market provides a workable model for describing how traders react to new market-moving information. Most importantly Mr. Plummer shows how to determine what he calls "THE GOLDEN RATIO " a series of mathematically derived numbers which - together with the price pulse - enable a trader to forecast major tops and bottoms with nearly magical precision. If this sounds too esoteric consider the following: Between 1929 and 1932 the Dow Jones average fell 344 points. According to the Golden Ratio that established an upside target of 1000. When 1000 was finally hit in 1965 it marked a 17-year turning point in the market! After bottoming out at 59.5 in June 1984 the U.S. Treasury bond futures embarked on an enormous rally finally peaking at 105.5 in April 1987 almost exactly as the Golden Ratio had predicted! Between 1990 and 1992 a period of great volatility in the currency markets the Golden Ratio forecast virtually every major top and bottom in the U.S. dollar/deutschemark market! In short The Psychology of Technical Analysis is the bible for traders who want to understand the dynamics of crowd behavior and the financial markets and who want to capitalize on those rare moves where really big profits can be made.