Efficient market theorists contend that markets
are random and thus not predictable. With the publication of Trading Against the Crowd, however, noted author, economist, and professional trader John Summa convincingly shows that investor
sentiment can be incorporated into profitable stock and stock market trading systems.
In this groundbreaking book, Summa explains how to use popular gauges of crowd psychology, such as put/call ratios,
option-implied volatility, short sales, investor surveys, and advisory opinion to trade against, or contrary to,
prevailing market sentiment.
He also makes compelling arguments against the efficient markets hypothesis with the presentation of his own quantitative
weekly bear and bull news-flow intensity indices, which he builds from news scans. This data series, and other
popular measures of crowd psychology, are processed through custom indicators that are programmed into profitable
trading systems, such as Squeeze Play I & II, Tsunami Sentiment Wave, and the Fourth Estate.
Trading Against the Crowd is the first book to provide a comprehensive assessment
of investor crowd psychology, offering valuable market timing tools and trading techniques, including: MetaStock
and Trade Station system and custom indicator code; comparative statistical studies of CBOE, OEX, and equity-only
put/call ratios; straightforward instructions for combining price triggers with sentiment indicators; a practical
guide to understanding put/call ratios, short sales, investor surveys, newsletter opinion, and stock market news-flow
intensity; how to use LEAP options as trading vehicles to avoid use of stop loss orders; use of put/call ratios
for trading the Treasury bond futures market; and test results and evaluation of trading system performance.
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Many of today's professional money managers rely on investor sentiment for improved market timing. They know that
at extremes of market sentiment, markets tend to be the most predictable.
Trading Against the Crowd shows
how you can begin to profit from these short- to medium-term sentiment waves generated by the actions of the speculative
crowd. Put into practice powerful sentiment data using thoroughly back-tested trading systems, and rise above the
herd mentality of the investor crowd, where potentially large profits await.
Order this book!
