LATEST ARTICLES

The Odd Lot Theory: Betting That Small Investors Are Wrong

The most successful investors tend to let reason, not emotion, guide their decisions. However, smaller investors have acquired a reputation for doing just the opposite – seeking out companies toward which they feel a personal connection and relying on intuition more than cold, hard logic.

Are You Investing Or Gambling?

Gambling is defined as staking something on a contingency. However, when trading is considered, gambling takes on a much more complex dynamic than the definition presents. Many traders are gambling without even knowing it - trading in a way or for a reason that is completely dichotomous with success in the markets.

Advanced Game Theory Strategies For Decision-Making

Game theory, the study of strategic decision-making, brings together disparate disciplines such as mathematics, psychology and philosophy. Game theory was invented by John von Neumann and Oskar Morgenstern in 1944 and has come a long way since then. The importance of game theory to modern analysis and decision-making can be gauged by the fact that since 1970, as many as 12 leading economists and scientists have been awarded the Nobel Prize in Economic Sciences for their contributions to game theory.

Is Your Personality Preventing Profitable Trades?

Quite a bit has been written on trading psychology and common behavioral traps, but the personalities of the actual traders remains a relatively unexplored field. Not everyone is cut out to be a trader, and some people will simply do better than others. Furthermore, different people trade in very different, even diametrically opposing, ways. In this article, we will take a look at some elements of trader personalities and how this impacts their success in the market.

Utilizing Prisoner’s Dilemma In Business And The Economy

The prisoner’s dilemma, one of the most famous game theories, was conceptualized by Merrill Flood and Melvin Dresher at the Rand Corporation in 1950, and formalized and named by Princeton mathematician Albert William Tucker. Prisoner’s dilemma basically provides a framework for understanding how to strike a balance between cooperation and competition, and is a very useful tool for strategic decision-making. As a result, it finds application in diverse areas ranging from business, finance, economics and political science to philosophy, psychology, biology and sociology.

Top Reasons Forex Traders Fail

The forex market is the largest and most accessible financial market in the world, but although there are many forex investors, few are truly successful ones. Many traders fail for the same reasons that investors fail in other asset classes. In addition, the extreme amount of leverage - the use of borrowed capital to increase the potential return of investments - provided by the market, and the relatively small amounts of margin required when trading currencies, deny traders the opportunity to make numerous low-risk mistakes. Factors specific to trading currencies can cause some traders to expect greater investment returns than the market can consistently offer, or to take more risk than they would when trading in other markets.

Loving Your Stocks? Don't Take This Cliché To Heart

Joachim Goldberg, a German behavioral finance specialist and co-author of the book "Behavioral Finance," which was first published in 1999, often warns people not to "fall in love with shares.” Women, he argues, are better investors than men, partly because they are better able to get rid of stocks (and presumably men, too) that are no longer financially worth keeping.

Master Your Trading Mindtraps

The popularization of speculative trading in the financial markets, partly due to the development of retail trading solutions offered on the internet, has created a new population of traders in the market. Most of these traders are non-professionals that are attracted by the potential to generate revenue quickly.

7 Controversial Investing Theories

When it comes to investing, there is no shortage of theories on what makes the markets tick or what a particular market move means. The two largest factions on Wall Street are split along theoretical lines into adherents to an efficient market theory and those who believe the market can be beat. Although this is a fundamental split, many other theories attempt to explain and influence the market - and the actions of investors in the markets. In this article, we will look at some common (and uncommon) financial theories.

The Downward Spiral Of Trading Addiction

Trading in the financial markets is stimulating, exciting and engrossing. But one can become addicted, just like with actual casino gambling or illegal drugs. Like any severe addiction, this can cost you your job, relationships and, of course, your financial resources. In this article we will consider what causes such addiction, the symptoms and how to break out of the downward spiral. Our focus is on the brain and understanding how its reward systems can literally train you to trade compulsively and dangerously.