Lars Tvede is not only a talented entrepreneur and speculator, who has created a personal fortune based on his comprehensive understanding of financial markets. He is also a well articulated author, who knows how to tell a good story, if as you enter a complicated subject such as the mechanisms behind stock trading.
The Psychology of Finance” is the title of a book that Lars Tvede has written and published on Schultz. It is the best book of the year.
Understanding the Behavioural Dynamics of Markets
«I have made leveraged bond and forex trades since my early twenties, either as carry trades or to chase large, fundamental trends. These markets are very technical, in the sense that market dynamics has a life of its own. However, I only really learned the nuts and bolts of technical trading when I joined MD Foods (Now Arla) at age 26.
I was first chief analyst for the group, which had 9,000 employees when I joined and 14,000 when I left six years later. The company, which was a great place to work, had a better credit rating than the state of Denmark at the time (years of socialist government!), and we acted as a sort of clearing bank for Danish banks, arbitrating liquidity between them every morning. I was running that function as well as commercial risk hedging, but my bigger and much more interesting and profitable task was to take outright positions; mainly in forex, and often in the hundreds of millions of USD.
What I realized here was how focused on charts everyone in the business was – the technical part of trading was huge. So I bought and borrowed all the library books on technical analysis I could get my hands on and went to seminars about the subject. Soon I knew most of what seemed worth knowing about the tools and principles of technical analysis of financial markets – the subject is not huge. But one thing I didn’t find: a theory to explain why technical analysis was of any value. The academic community had never made one, since orthodoxy was the «andom walk hypothesis» stating that prices oscillated randomly around fair value and could not be predicted. That hyphothesis didn’t leave any space for technical analysis, and it was obviously (to me) not true, since we made a lot of money forecasting markets. So I decided to develop theories to explain the underlying phenomena behind technical analysis.
Covers and other Editions
This book has been published in international markets in several other languages and editions.