Predictably Irrational by Dan Ariely Review
This book has nothing to do with trading the Forex market or any other market, but it can give you some much insight about how we, human beings make our day to day decisions (including trading decisions).
I have an economics background, and one of the main economic theories (probably the most important one) states that we make rational decisions, based on the information that we have at the moment. The same theory governs what happens on the financial markets, or any other market: supply and demand.
What would you think if I tell you that this theory is all wrong? Well, after you read this book you realize that we not only make irrational decisions, we act sistematically irrational. The author performs real life experiments to state these points about this, and let me tell you, he is right: we are all irrational.
And this also relates to trading any financial market. We like to think we make rational trading decisions, but in fact, most of the time we make irrational trading decisions. What is good though is that by being aware of these irrational decisions, you can make a steady effort to get rid of them (it’s not easy though, but doable).
If you find yourself making the same mistakes over and over again, get this book, you’ll see your trading from a different perspective.