The New Discipline of Behavioral Finance

The New Discipline of Behavioral Finance Provides Fresh Insights for System Building and Technical Analysis.... Successful market technicians have long recognized the psychological and sociological components of market behavior and that traders’ actions are influenced by their emotions and by cognitive errors. Up until very recently, the majority of the financial world scoffed at the idea of incorporating human frailties into financial analysis, but now a whole new field of study has arisen — behavioral finance — that believes these human flaws are consistent, measurable, and predictable. Hank describes the general paradigm shift that is occurring in the world of finance and shows how technical market analysis can systematically utilize the human motivation that lies beneath all the numbers. In this presentation, Hank outlines the evolution of behavioral science and shows its close parallels with technical analysis, specifically in the study of herd instinct and mass psychology. Behavioral scientists examine finance from a different orientation than most technicians. Behavioral science is a theoretical discipline that attempts to draw generalities about behavior rather than make specific predictions about an individual’s actions. Hank shows you how these new perceptions can add to your own understanding of the markets. Building upon the concepts of mass behavior, Hank also explains why successful analysis examines and quantifies the parameters of price, time, and volume into a complete and comprehensive system. After demonstrating the mass behavior framework, Hank takes you through the steps for developing and testing your own technical trading systems. He explains how the different types of market data interact, why each type of market data should be analyzed in depth, and how to select indicators that add up to more meaning. Hank teaches a new, effective and realistic conceptual framework from within which you can develop your own profitable and satisfying trading system.

The Wyckoff Method — Analyzing Price & Volume Movement Using the Principles of Mass Psychology

In this session, you will gain a comprehension of how mass psychology in action creates the shape of a conceptual framework for technical market analysis. Hank emphasizes an appreciation for the cause and effect linkages among price, volume, time, and sentiment and explains how these factors combine to form stages of accumulation, markup, distribution and markdown. You will have a further sensitivity to the value of trading ranges and divergence and develop an understanding of the critical need for selecting between a trend-following system and a trend-fading system. This workshop provides you with a unique opportunity to learn the principles of the Wyckoff Method of technical analysis and trading. You will learn to combine the technical tools you already use with an entirely new perspective on market behavior, enhancing both your technical trading skills and your ability to judge critical trading situations. You will learn to concentrate your analysis on three essential factors: tick-volume or volume (the intensity of trading), the relationship between price movement and volume, and the time required for all the movements to run their respective courses. The information derived by using a volume or tick-volume approach can directly influence your day-to-day decision making process. It will enhance your awareness of the market’s real strengths or weaknesses.

Wyckoff by the Action-Sequence Method: An Effective Way to Teach and Learn Technical Market Analysis

In this session, Hank introduces his Action-Sequence method of learning, a uniquely effective technique for enhancing teaching and learning skills that calls upon participants to interact in a way that goes well beyond a basic workshop. You will be part of an action-feedback-replay exercise in which you will conduct an ongoing technical analysis exercise, monitoring the daily vertical line chart of a market index. Hank provides you with all of the appropriate Wyckoff principles and techniques, and then conducts his session as an “open book” exercise. First, you examine an ACTION form. You will be asked to reconstruct the chart price and volume, and interpret the present position and probable future trend of the market. You will also be requested to judge the underlying motive of the “Composite Operator” and take definite action: buying, selling, or remaining neutral. You will then exchange your ACTION sheet for a FEEDBACK sheet which will retell what actually took place (interpreted using the Wyckoff Method). You will then compare your expectations, based upon your ACTION form, to the actual results. Finally, you will proceed to a REPLAY sheet (another version of the ACTION sheet), which gives you the opportunity to rectify past mistakes or reinforce past successes. Upon completion of the REPLAY sheet you will receive the next ACTION sheet in the sequence. You will continue through the action-feedback-replay cycle until the end of the chart data. This workshop provides you with an opportunity to learn from your own mistakes under the guidance of an expert. At the conclusion of this exercise, you will have learned the principles of the Wyckoff Method of technical analysis and trading. Through repeated applications in a simulation, this interactive session will enhance both your trading skills and your ability to judge critical trading situations.