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One of the best Trading Psychology books I've ever read!
"Psychology of Intelligence Analysis" by Richards J Heuer, Jr., published by the CIA's Center for the Study of Intelligence, 1999.
Available as a pdf download from this webpage
Ok, so it's a CIA book written for Intelligence Analysts, not a trading book written for traders. However, the information available in this book is superb. Well written and easy to follow. This is an excellent source of information on how we think, and the cognitive biases which undermine our ability to process information and conduct market analysis.
VERY APPLICABLE TO TRADING. HIGHLY RECOMMENDED.
Here's what's it covers:
Part 1 - Our Mental Machinery
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Chapter 1: Thinking About Thinking
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Chapter 2: Perception: Why Can't We See What Is There to Be Seen?
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Chapter 3: Memory: How Do We Remember What We Know?
Part 2 - Tools for Thinking
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Chapter 4: Strategies for Analytical Judgment: Transcending the Limits of Incomplete Information
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Chapter 5: Do You Really Need More Information?
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Chapter 6: Keeping an Open Mind
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Chapter 7: Structuring Analytical Problems
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Chapter 8: Analysis of Competing Hypothesis
Part 3 - Cognitive Biases
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Chapter 9 - What Are Cognitive Biases?
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Chapter 10 - Biases in Evaluation of Evidence
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Chapter 11 - Biases in Perception of Cause and Effect
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Chapter 12 - Biases in Estimating Probabilities
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Chapter 13 - Hindsight Biases in Evaluation of Intelligence Reporting
Part 4 - Conclusions
Available as a pdf download from this webpage
PS. I discovered this book via a recommendation, posted by Ray Barros in his blog. If you're not familiar with Ray Barros, you should be. His blog is one of the few I check daily. His trading style is very different, but the insights he shares on business, risk and money management and trader psychology, are excellent. Be sure to check it out regularly.
Cheers,
Lance Beggs
http://www.YourTradingCoach.com
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