“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
Chapter 1: Thinking About Thinking
Chapter 2: Perception: Why Can’t We See What Is There to Be Seen?
Chapter 3: Memory: How Do We Remember What We Know?
Part 2 – Tools for Thinking
Chapter 4: Strategies for Analytical Judgment: Transcending the Limits of Incomplete Information
Chapter 5: Do You Really Need More Information?
Chapter 6: Keeping an Open Mind
Chapter 7: Structuring Analytical Problems
Chapter 8: Analysis of Competing Hypothesis
Part 3 – Cognitive Biases
Chapter 9 – What Are Cognitive Biases?
Chapter 10 – Biases in Evaluation of Evidence
Chapter 11 – Biases in Perception of Cause and Effect
Chapter 12 – Biases in Estimating Probabilities
Chapter 13 – Hindsight Biases in Evaluation of Intelligence Reporting
Part 4 – Conclusions
Chapter 14 – Improving Intelligence Analysis