How Markets Really Work: Quantitative Guide to Stock Market Behavior, 2nd Edition A Quantitative Guide to Stock Market Behavior

For years, traders and investors have been using unproven assumptions about popular patterns such as breakouts, momentum, new highs, new lows, market breadth, put/call ratios and more without knowing if there is a statistical edge.

Common wisdom holds that the stock markets are ever changing. But, as it turns out, common wisdom can be wrong. Offering a comprehensive look back at the way the markets have acted over the last two decades, How Markets Really Work: A Quantitative Guide to Stock Market Behavior, Second Edition shows that nothing has changed, that the markets behave the same way today as they have in years past, and that understanding this puts you in a prime position to profit. Written by two top financial experts and filled with charts and graphs that illustrate the market concepts they develop, the book takes a sometimes contrarian view of everything from market edges to historical volatility, and from volume to put/call ratio, giving you all that you need to truly understand how the markets function. Fully revised and updated, How Markets Really Work, Second Edition takes a level-headed, data-driven look at the markets to show how they function and how you can apply that information intelligently when making investment decisions.

How Markets Really Work, Second Edition has over 850 practical, easy-to-use historical probabilities on the most commonly traded market scenarios. For years, traders and investors have been using unproven assumptions about popular patterns such as breakouts, momentum, new highs, new lows, market breadth, put/call ratios and more without knowing if there is a statistical edge.  Here's how you can use How Markets Really Work in your trading every day. Learn how to focus on trades that have the best edge and stop trading setups that have zero edge. Every time you trade, just look up the current market action in the book so that you can potentially maximize your winning trades while weeding out the losing ones. Gain an edge that many traders and professional traders do not have. Most traders will continue to operate according to incorrect conventional wisdom because much of it "seems to make sense." But by using How Markets Really Work as your daily reference guide, you will be able to take advantage of market behaviors that consistently repeated themselves over and over again in the past. Use it to better time your entries and exits into stocks and ETFs. Many times the trading system or methodology you are using will tell you to enter or exit a trade into price action that matches one of the patterns listed in How Markets Really Work. When this occurs, it's a great opportunity for you to fine tune your actions so that statistical probabilities are working in your favor and not against you. The knowledge contained in How Markets Really Work can be used in developing your very own systems and strategies. Whether you are a system developer or you just want to improve your existing trading strategy, you can use the core knowledge in this book to stimulate your own research and create new systems. Impact your trading with never-before-seen research on put/call ratios, price movement, breadth indicators, large one-day moves, volume and much, much more. Whether you use these indicators or not, you will finally be able to make informed decisions about their true value to your trading.

For years, traders and investors have been using unproven assumptions about popular patterns such as breakouts, momentum, new highs, new lows, market breadth, put/call ratios and more without knowing if there is a statistical edge. Common wisdom holds that the stock markets are ever changing. But, as it turns out, common wisdom can be wrong. Offering a comprehensive look back at the way the markets have acted over the last two decades, How Markets Really Work: A Quantitative Guide to Stock Market Behavior, Second Edition shows that nothing has changed, that the markets behave the same way today as they have in years past, and that understanding this puts you in a prime position to profit. Written by two top financial experts and filled with charts and graphs that illustrate the market concepts they develop, the book takes a sometimes contrarian view of everything from market edges to historical volatility, and from volume to put/call ratio, giving you all that you need to truly understand how the markets function. Fully revised and updated, How Markets Really Work, Second Edition takes a level-headed, data-driven look at the markets to show how they function and how you can apply that information intelligently when making investment decisions.