Behavioural Finance Workshop

Our research team at Trader Oracle has spent years analysing the main lineaments of behavioural finance: why it occurs; identifying its influence on the organization’s processes; mitigating its negative effects on portfolios and how it can seriously distort market prices even in the presence of arbitrageurs. On the positive side, we have succinctly identified the processes to utilize insights from behavioural finance to construct more acceptable and productive portfolios for clients.

Course Contents:

The Limits to Arbitrage: Why Markets Can't Be Fully Efficient and Why We Shouldn't Expect Them to Be

  • How to master the use of technical analysis to predict future directional price movement with a high degree of accuracy across all asset classes.
  • Receive professional real time guidance on how to correctly interpret the key indicators to assess the current state of the buying or selling of the smart money players to mark your setups in process, as they are forming themselves.
  • The relationship of "stops to blow offs and shake outs" and how to identify the correct placement of your specific stop area in your trade.
  • Understand the precision points of entries and then the correct areas to exit your trades based on price profit targets that have been well laid out in advance.
  • While managing the trade, cover "what if" scenarios otherwise understood as redundancy. If and when the trade goes against you, you will know how to react quickly and with confidence to protect your emotional and monetary capital.
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The Biases, Beliefs and Bizarre Investment Behaviours That Exist Beneath Our Rational Exteriors Exercises Will Demonstrate These Behaviours in Course Participants

  • Overconfidence and Optimism.
  • Representative and Availability Bias.
  • Illusion of Knowledge.
  • Belief Perseverance.
  • Framing and Anchoring.
  • Mental Accounting.
  • Hindsight Bias.
  • Narrative and Story Telling.
  • "Short Term" versus "Long Term" Decision Making - Which one wins and when?
  • Ambiguity Aversion.

The Evidence for the Presence of These Effects in Investors Both Professionals and Individuals

  • Behavioural Portfolio Theory.
  • Stock Trading Behaviour.
  • Stock Analyst’s Biases.
  • Managerial Mistakes.
  • Home City Bias.

Why These "Irrational" Behaviours Occur and Why They Are Hard to Eradicate

  • Psychology of Behaviour.
  • Competing Modules in the Brain.
  • The difficulty of Rational Thought.
  • The lack of a Unique Utility Function for an individual.

The Good Side of These Behaviours and Why We Wouldn't Want to Completely Eradicate Them

  • Rational Decision Making under uncertainty doesn't get anything done.
  • Bubbles are good for society, bad for most investors.
  • Social Capital.
  • Game Theory - Escape from Prisoners Dilemma.
  • Wants and Needs.
  • “Libertarian Paternalism".

How to Identify the Presence of the Psychological Biases in Your Trading, Decision Making, Risk Monitoring, Compliance Mechanisms and How to React to These Biases in Your Clients and Competitors

  • Two checklists for Managers and Analysts.
  • Training and Education.
  • Processes to mitigate risks of Wrong Decisions.

How to Build Portfolios for Clients That Meet Their Wants and Their Needs

  • Hierarchy of Needs.
  • The Chaos of Wants.
  • Social Capital.
  • Building Trust.
  • Education.
  • A portfolio for the "short-term" or the "long term"?

The Insights of the New Science of Neuroeconomics on Financial Decision Making

  • The importance of Trust.
  • The importance of Emotions, Drives and Motivations in making decisions.
  • Automatic versus Controlled Brain Processes.
  • Gender Differences.
  • The structure of the Brain: Decisions under Ambiguity versus Randomness. Where are short and long-term decisions processed in the brain?
  • How Ethics and Morality cannot be divorced from decision making processes.

The "Behavioural Finance Workshop" is highly recommended for security analysts, market strategists, marketing managers, portfolio managers, client managers, relationship managers, risk professionals and technical analysts who want to get a structured introduction to the topic of behavioural finance!