Trading Realities

Trading Realities : The Truth, the Lies, and the Hype In-Between

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Trading Realities teaches investors and traders the universal, basic principles that apply to every financial market: stocks, bonds, commodities, foreign exchange, futures, options, and beyond. Writing for beginners and experienced investors alike, successful trader and author Jeff Augen illuminates key issues that are often mentioned but rarely fully understood: issues such as leverage, liquidity, market trends, risk, valuation, interest rates, and the impact of news and events. Most important, he shows how to apply this knowledge to trade and invest far more profitably. Augen focuses on the massive forces that really move financial markets: the market dynamics that are fundamental to your success, regardless of your investment strategies or the asset classes you choose. You'll learn how to value markets in absolute terms (e.g. constant currency), rank investment vehicles according to risk; assess the real impact of leverage and the true meaning of trends; interpret the flow of money between markets; and much more. Augen shows how to identify and collect the information that matters most (and ignore the information that doesn't matter). Once you have the facts you need, you'll learn how to use those facts to gain a clear advantage: one that you can sustain through any market environment.
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Product details

  • Hardback | 272 pages
  • 155 x 209 x 27mm | 380g
  • Financial Times Prentice Hall
  • Upper Saddle River, United States
  • English
  • Illustrations
  • 0137070098
  • 9780137070091
  • 941,284

Back cover copy

"Jeff Augen is truly a unique voice and mind in today's financial discourse. He has a knack for translating intricate economic and market interrelationships into easy-to-understand ideas and has a way of seeing patterns and cause-effect relationships across markets. For those who listen, there is much to learn and much from which to profit. Ultimately, he gives individuals a fighting chance to participate in the markets to their advantage."

--H eather L arson -B lakestad , Executive Editor, Stocks, Futures, and Options Magazine



"Jeff is a true scientist who has turned his formidable skills to the markets. His systematic research and open mind have led to a series of insights that are stunningly original and an investment philosophy based on facts, with no time wasted on mere conventional wisdom. Following Jeff's thinking can help any investor avoid many costly blind alleys and develop a strategy based on how markets actually work."

--R obert B irnbaum , former hedge fund president



"Jeff Augen reveals the 'ugly truth' that everyone investing in the markets needs to hear and also applies the lessons to the real world of trading. He attacks popular myths, notably about whose fault it is when investment decisions lead to losses and who gets credit for being a wise investor. The tie-in between investment/trading strategic thinking and well-explained economic reality is refreshing and extremely valuable."

--M ichael T homsett , author of Put Option Strategies for Smarter Trading and The Options Trading Body of Knowledge



Today's financial markets are complex and dangerous. The value of individual investments is now more strongly influenced by world economic and geopolitical events than by the underlying fundamentals of the company being invested in. Layered on this intricate web of forces is the impact of high-frequency computer trading programs that enter and exit trades in a fraction of a second and drive 60% or more of the market volume on any given day. Trading Realities provides investors with new skills and approaches to succeed in this environment. Without this enhanced knowledge, investing is no more than gambling.



Writing for beginning and experienced investors alike, successful trader and author Jeff Augen focuses on the powerful forces that really move markets: the dynamics that are fundamental to your success, no matter which strategies or asset classes you choose. He provides new approaches to identifying market trends, exploiting global economic forces, trading the news, valuing risk, and dissecting economic reports released by the government.



You'll learn how to gain a clear advantage: an advantage you can sustain through any market environment.



Invest with the markets, not against them
Leverage the "mega" forces that drive all markets, in all market environments Why markets always move in the direction that damages the most investors
... how to recognize that direction and move with it Why even experienced investors overrate their knowledge and skill
What you really need to know before you make an investment How to clarify and compare the real risks of potential investments
Getting past the myths of risk and leverage and understanding the realities
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Table of contents

Preface xiii

First Principles 1

Chapter 1: Global Economic Forces and the Average Investor 5

Chapter 2: The Harsh Realities of the Marketplace 23

Chapter 3: Betting with the House 49

Chapter 4: Identifying Trends 63

Chapter 5: A New Era 117

Chapter 6: The Importance of Volatility 155

Chapter 7: Strategies for a New Market 175

Appendix A: Options Primer 225

Index 251
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About Jeff Augen

Jeff Augen, currently a private investor and writer, has spent more than a decade building a unique intellectual property portfolio of databases, algorithms, and associated software for technical analysis of derivatives prices. His work, which includes more than a million lines of computer code, is particularly focused on the identification of subtle anomalies and price distortions.



Augen has a 25-year history in information technology. As cofounding executive of IBM's Life Sciences Computing business, he defined a growth strategy that resulted in $1.2 billion of new revenue and managed a large portfolio of venture capital investments. From 2002 to 2005, Augen was President and CEO of TurboWorx Inc., a technical computing software company founded by the chairman of the Department of Computer Science at Yale University. His books include Day Trading Options, Trading Options at Expiration, The Option Trader's Workbook, and The Volatility Edge in Options Trading. He currently teaches option trading classes at the New York Institute of Finance and writes a weekly column for Stocks, Futures and Options magazine.
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Rating details

16 ratings
3.94 out of 5 stars
5 31% (5)
4 44% (7)
3 19% (3)
2 0% (0)
1 6% (1)
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