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How Markets Really Work: A Quantitative Guide to Stock Market Behavior
 
 
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How Markets Really Work: A Quantitative Guide to Stock Market Behavior [Hardcover]

Larry Connors (Author), Conor Sen (Author)
3.5 out of 5 stars  See all reviews (17 customer reviews)

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Book Description

August 2004
Published for the very first time ever. 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.

Have you ever wondered the following...

Do these patterns actually make you money? Read on and you'll be surprised by what 15 years of new, previously unpublished research reveals.

Is there a radically different, better way to trade these patterns and indicators that somehow has escaped the awareness of traders and investors? You'll find the answers below...

The answers to both of these questions and much more is contained in Larry Connors' new book, How Markets Really Work. Through new research, much of which has never before been published, you will be able to clearly see which of nearly 850 meticulously researched patterns and indicators have an edge -- and which do not. Best of all, you will be able to apply this information whenever you trade.

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. Each Chapter Of How Markets Really Work Is Backed By Up To 15 Years Of Historical Results!

Frequently Bought Together

How Markets Really Work: A Quantitative Guide to Stock Market Behavior + Short Term Trading Strategies That Work (Softcover) + High Probability ETF Trading: Professional Strategies to Improve Your ETF Trading (Softcover)
Price For All Three: $93.92

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Editorial Reviews

Review

"...it has done much to force us to revise our trading theories going forward." -- The Gartman Letter, October 7, 2004

About the Author

Larry Connors is the Chairman and CEO of The Connors Group, Inc., a financial markets information company. He is also the Managing Partner of Connors Capital, L.L.C., a private investment company. Mr. Connors has authored a number of top-selling books on market strategies and volatility trading, including Street Smarts (with Linda Raschke), Connors On Advanced Trading Strategies, Trading Connors VIX Reversals and The Trading Windows Strategy. Street Smarts has recently been selected by Technical Analysis of Stocks and Commodities magazine as one of "The Classics" for trading books written in the past century. His books have also been published in German, Italian and Japanese.

Product Details

  • Hardcover: 145 pages
  • Publisher: TradingMarkets Publishing Group (August 2004)
  • ISBN-10: 0975551310
  • ISBN-13: 978-0975551318
  • Product Dimensions: 10.8 x 8.5 x 0.7 inches
  • Shipping Weight: 1.6 pounds (View shipping rates and policies)
  • Average Customer Review: 3.5 out of 5 stars  See all reviews (17 customer reviews)
  • Amazon Best Sellers Rank: #892,782 in Books (See Top 100 in Books)

 

Customer Reviews

17 Reviews
5 star:
 (8)
4 star:
 (3)
3 star:    (0)
2 star:
 (1)
1 star:
 (5)
 
 
 
 
 
Average Customer Review
3.5 out of 5 stars (17 customer reviews)
 
 
 
 
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63 of 71 people found the following review helpful:
1.0 out of 5 stars I have read a lot of investment books, October 29, 2004
This review is from: How Markets Really Work: A Quantitative Guide to Stock Market Behavior (Hardcover)
This one is BY FAR the biggest waste of money of them all. This guy basically presents ONE idea in the whopping 145 pages, of which 75, yes SEVENTY FIVE are graphs that show, literally 2 bars or 2 lines. This is absolutely not an exaggeration. 75 of the 145 8.5" by 11" pages have ONE graph with 2 bars showing a comparison of, for example, how the S&P 500 performed after 2 consecutive down days over the next week vs 2 consecutive up days. That's it. Nothing else. 18 pages are tables of numbers that, if you've read one of them, you've read them all. This leaves 53 other pages, of which 11 are COMPLETELY BLANK!! Of the 42 remaining pages, maybe 10 of them have more than 2 paragraphs and fill more than 2/3rds of the page. This book is a complete sham. I highly recommend Amazon pull it. I will be calling Amazon to return this book immediately for a full refund.
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14 of 15 people found the following review helpful:
1.0 out of 5 stars Contrarian argument, June 3, 2006
This review is from: How Markets Really Work: A Quantitative Guide to Stock Market Behavior (Hardcover)
This book is a quick argument for short-term contrarian trading in the stock market, backed by a zillion pages of data (that nobody is going to do more than flip through and glance at a page here and there). It does makes a good argument, however.

To follow the conclusion in your own trading you will be buying after the market sells off and selling after it rallies. I actually developed and published a simple system based on these principles using Bollinger Bands and betting on reversals when price hits the outer band and stalls the next day (without bursting through it). It works well most of the time, especially in non-trending markets.

The problem with the book is it's failure to follow through with any suggestions for rule-based systems based on it's conclusion. OK, bet on reversals - when do you place a trade? While the market is still moving or after it stalls? How much of a move does it need to be before entering a position? Is it applicable to all time frames? When do you take profits?

Markets move and then correct in waves 95% of the time. Marcel Link concludes in his excellent book "High Probability Trading" that betting on the smaller-wave corrections just isn't worth it in the long run and you are better off betting on waves in the direction of the bigger trend. I tend to agree.

This book is way, way, waaayyyy overpriced for what it is. That being said, it is the best 1-star book I have read.

For me, books are either a 1 star, 3 star, or 5 star. The 5-stars are the classics that are too good to ever remove from your bookshelf, like many of the books I recommend at winningfinancialstrategies.com. The 3-stars get sold on ebay when the bookshelf overflows. The 1-stars go to Salvation Army.
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16 of 18 people found the following review helpful:
5.0 out of 5 stars mark it up and keep it on your desk, September 7, 2004
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This review is from: How Markets Really Work: A Quantitative Guide to Stock Market Behavior (Hardcover)
If you've ever watched a perfect looking breakout fall apart before your very eyes, you know that they don't always work. I know I've done it many times and I know a lot of traders who do, too. And I've sold when the market looks really bad, only to witness a sharp rally stop me out.

These are two examples of trades I won't be taking any more (under certain conditions) now that I've read this book. There was obviously a lot of research done for this book, which covers various market scenarios and what the market does in the short-term. There is a lot of what you might call "conventional wisdom" that is dispelled in this book.

There are no trading strategies in this book; it is more of a refence manual for the market and what it is likely to do given certain conditions. Whereas the Stock Trader's Almanac breaks down days of the year and gives you the probabilities of the market going up, How Markets Really Work breaks down various market conditions and quantifies market behavior.

Mine is already marked up (no dog ears yet, but give it time) and it's sitting on my desk for easy reference.
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Inside This Book (learn more)
First Sentence:
For many of us, Michael Lewis' 1989 best-selling book Liar's Poker was the first inside look at what day-to-day life was like at a major Wall Street trading firm. Read the first page
Key Phrases - Statistically Improbable Phrases (SIPs): (learn more)
average weekly gain, declining issues, advancing issues, market breadth, rises today, average daily gain, multiple days
Key Phrases - Capitalized Phrases (CAPs): (learn more)
Today's Put, Time Period Gain, Loss Benchmark Avg, Profitable Benchmark, Index Rule, Nasdaq Advancers, Wall Street, Nasdaq Decliners, Volatility Index, Row After
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