How Markets Really Work PDF

How Markets Really Work PDF

How Markets Really Work PDF (A Quantitative Guide to Stock Market Behavior)– 2nd 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.

Category: Stock

Author: Laurence A. Connors
Cesar Alvarez 

Language: English

Free Download link: At the end of the post


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.

Table of Contents- How Markets Really Work PDF

Market Edges 1
Short-Term Highs and Short-Term Lows 7
Higher Highs and Lower Lows 25
Up Days in a Row versus Down Days in a Row 43
Market Breadth 65
Volume 83
Large Moves 93
New 52-Week Highs, New 52-Week Lows 105
Put/Call Ratio 117

Volatility Index (VIX) 127
The Two-Period RSI Indicator 147
Historical Volatility 157
Creating a Sample Strategy from This Research 159
Applying the Information in This Book 163
About the Authors 167
Index 169


“That Actually Test Out Profitably- Lots of good reviews have already been written about this book, and I agree with most of what they relay so I won’t repeat them. I will add, though, it is rare you find a trading book with clear setup, entry and exit rules that actually test out well independently on “out of sample” data (i.e., data not used when developing / optimizing the system). The systems provided in this book do just that – they can be independently validated, and the ones I have tested have performed well.

I don’t think the value of this point can be overstated. If you are interested in using rule-based trading systems, you will not find a better book of testable systems for the price”.D. Witkin

About the author

Laurence A. Connorshas more than 30 years of experience working in the financial markets industry. He is managing partner of LCA Capital, an asset management firm, and Connors Research, a financial markets research company. He has built two multimilliondollar financial market companies since 1995 including The Connors Group, a financial markets information company. In 2009, The Connors Group was twice chosen as one of the 10 fastest-growing private companies by the Entrex Private Company Index.

Larry started his career in 1982 at Merrill Lynch and later moved on to become a vice president with Donaldson, Lufkin, Jenrette (DLJ). He has authored top-selling books on market strategies and volatility trading, including How Markets Really Work, Street Smarts (with Linda Raschke), and High Probability ETF Trading. His books have been translated into German, Italian, Spanish, Russian, Japanese, and Chinese.

Larry’s opinions and insights have been featured and quoted in the Wall Street Journal, New York Times, Barron’s, Bloomberg TV & Radio, Bloomberg Magazine, Dow Jones Newswire, Yahoo! Finance, E-Trade Financial Daily, and many others. He has also been a featured speaker at a number of major investment conferences over the past two decades.

Larry is also the creator of The Machine and, most recently, The Machine Advisor. The Machine Advisor is web-based investment decision support software that allowsfi nancial advisors to differentiate their practice through both innovative active investing strategies and interactive sales and marketing tools.

Cesar Alvarez  is the director of research for Connors Research.
Cesar was a senior designer of Excel in the 1990s, helping Microsoft further create and build out Excel. For the past nine years Cesar has been a professional investor and researcher.

Cesar has been at the forefront of stock market research, having developed a number of successful trading systems now used by numerous investors and fund managers in the United States and internationally. Cesar holds a Bachelors of Science in Electrical Engineering and Computer Science and a Masters of Science in Computer Science from the University of California, Berkeley.

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