“Psychology of Intelligence Analysis” by Richards J Heuer, Jr., published by the CIA’s Center for the Study of Intelligence, 1999.
Available as a pdf download from this webpage
Ok, so it’s a CIA book written for Intelligence Analysts, not a trading book written for traders. However, the information available in this book is superb. Well written and easy to follow. This is an excellent source of information on how we think, and the cognitive biases which undermine our ability to process information and conduct market analysis.
VERY APPLICABLE TO TRADING. HIGHLY RECOMMENDED.
Here’s what’s it covers:
Part 1 – Our Mental Machinery
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Chapter 1: Thinking About Thinking
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Chapter 2: Perception: Why Can’t We See What Is There to Be Seen?
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Chapter 3: Memory: How Do We Remember What We Know?
Part 2 – Tools for Thinking
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Chapter 4: Strategies for Analytical Judgment: Transcending the Limits of Incomplete Information
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Chapter 5: Do You Really Need More Information?
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Chapter 6: Keeping an Open Mind
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Chapter 7: Structuring Analytical Problems
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Chapter 8: Analysis of Competing Hypothesis
Part 3 – Cognitive Biases
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Chapter 9 – What Are Cognitive Biases?
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Chapter 10 – Biases in Evaluation of Evidence
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Chapter 11 – Biases in Perception of Cause and Effect
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Chapter 12 – Biases in Estimating Probabilities
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Chapter 13 – Hindsight Biases in Evaluation of Intelligence Reporting
Part 4 – Conclusions
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Chapter 14 – Improving Intelligence Analysis