Trading On Sentiment: The Power Of Minds Over Markets

Leverage a true understanding of crowd psychology to trade more profitably

From Richard Peterson—an emerging expert on the psychology of financial markets—comesTrading on Sentiment, The Power of Minds Over Markets, a thorough expansion of Peterson's earlier works that explains how crowd psychology moves market prices around the world. Readers will quickly get up to speed on the latest tips and techniques on sentiment analysis and trading, with points driven home by real-world examples from global stock markets and a history of crowd behavior in markets that sheds light on why trading on sentiment is so powerful.

Each chapter of this engaging, practical work begins with an unusual, real-world investment story, followed by an analysis of the neuroscience that played into the tale and additional examples of similar market action. Chapters are then summed up with exercises that investors can use to build their mental skillset based on the newly-learned concepts about the integration of information, biology, and markets.

• Gain a thorough understanding of how crowds and market prices can be predictably influenced by news, rumor, and social media
• Find out how human biology affects trading, and develop an integrated understanding of information, minds, and markets
• Learn and practice techniques for eliminating bad investing habits from your investment approach
• Discover when you should trade along with the herd, and when you should take a contrarian approach

Trading on Sentiment is your complete guide to understanding the effects of human thought processes and sentiment on global stock market prices.

Dr. Richard L. Peterson has emerged as an expert on the psychology of the financial markets. His firm MarketPsych (www.marketpsych.com) distributes sentiment and macroeconomic indices derived from language analysis of global news and social media through Thomson Reuters. As portfolio manager for the outperforming MarketPsy Long-Short Fund LP from 2008-2010, he successfully developed and deployed psychology-based quantitative models. In the educational field he has developed popular financial personality tests, published widely in academic journals including Games and Economic Behavior andJournal of Neuroscience, and is an associate editor of the Journal of Behavioral Finance. His books,Inside the Investor's Brain (Wiley, 2007) and MarketPsych (Wiley, 2010) were both named top financial books of the year byKiplinger's. Dr. Peterson received cum laude Electrical Engineering (B.S.), Arts (B.A.), and Doctor of Medicine degrees (M.D.) from the University of Texas. He performed postdoctoral neuroeconomics research at Stanford University and is Board-certified in Psychiatry. Dr. Peterson speaks and coaches globally on investor performance optimization and sentiment analytics.