Larry Connors - Buy the Fear, Sell the Greed: 7 Behavioral Quant Strategies for Traders

Copyright 2018, Laurence A. Connors and Connors Research, LLC.

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ISBN 978-0-578-20650-9

EBook ISBN 978-0-578-20651-6

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The Connors Group, Inc., Connors Research and Laurence A. Connors (collectively referred to as Company) are not investment advisory services, nor registered investment advisors or broker-dealers and do not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Companys website, or in its publications, are made as of the date stated and are subject to change without notice.

It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Companys products (collectively, the Information) are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Companys website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.

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Contents

i. Connors Research Traders Journal (Volume 7):
Superior Trade Construction for Asymmetrical Gains

ii. Connors Research Traders Journal (Volume 3):
Stops (Still) Hurt

iii. AmiBroker Add-on Code for the Trading
Strategies in Buy the Fear, Sell the Greed

x. Relative Strength Indicator Formula
and ConnorsRSI Calculation

As with all of the books we have published over the years, this one required a team of dedicated individuals to get it from a raw manuscript to the finished product you now hold in your hands.

A special thank you from me to the following people who assisted in the creation of this book.

Cesar Alvarez, Brittany Connors, Drew Markson, Lani Meyer, Jason Meyer, Matt Radtke, Jose Pepito, Jr., Asif Khan, and Danilo Torres.

In war tomorrow, we shall be dealing with men subject to the same emotions as were the soldiers of Alexander.

George S. Patton

From George Pattons Personal Papers

The Secrets to Victory

March 26, 1926

L ets imagine youre asking for professional advice on an important financial matter from someone who is experiencing the following symptoms:

Nausea

Dizziness

Chest pain

Headaches

Neck aches

Stomach upset

Pulsing in the ear

Burning skin

Shortness of breath

Electric shock feeling

Shooting pains in the face

Heart palpitations

Weakness in legs

Feelings of going crazy

Fear of impending doom

On a scale of 1-10, how confident are you of this persons judgment?

8-10 - Highly confident. This guy definitely has his act together.

5-7 - Somewhat confident. Maybe the shooting pains in his face and his heart palpitations are a bit bothersome, but youre willing to overlook everything else, including his feelings of burning skin, nausea, dizziness, and the weakness in his legs.

2-4 - Little confidence. Feelings of going crazy and fear of impending doom are not quite the qualities that inspire strength and confidence in someones judgment in making financial decisions for you.

- None. Nada. Nul. Nicht. ZERO! The guys likely a nut. Who in their right mind would rely on the judgment of a person in this condition???

The Correct Answer

You likely answered either 2-4 or 1 (OK, I know you answered 1).

The Offer

Now lets assume I make the following offer to you: I offer you the chance to trade directly against traders and investors who are having the exact symptoms listed above, including the feelings of going crazy and impending doom. And as a bonus

1. You can trade one-on-one against them;

2. You get to determine the times youll trade against them;

3. You get to construct the trade however you feel is best for you;

4. And you get to do this multiple times every month for the rest of your life. On top of this you know that had you done this over the past quarter century, you would have won anywhere from over 70% of the time to up to 97% of the times you did this.

How does this make you feel? Would you accept this offer?

Most people certainly would and Im sure you would too. This book is going to show you when, where, and how to do this.