Are there books that explain trader behavior and the possible reasons behind market movements? I currently have "Trading and Exchanges: Market Microstructure for Practitioners" by Larry Harris. Are there other books you would recommend? It doesn't have be a book about market microstructure.
Not familiar with the book, but I'd be interested in how the author tracks things from the academic journals to "practitioners". (AND how fleshed out his end notes are. ) Any thoughts? The last time I specifically looked for it, there was no such bridge -- so 'good on him' for at least trying.
It's really simple, supply and demand. You cannot possibly know why traders or investors decide to buy or sell. After the fact you can speculate as to the why but you can only guess at what might happen tomorrow. Go to your local auction to get an idea of how it works.
The big boys (hedge funds, mutual funds, brokers and banks) will not tell you if they are buying or selling a stock. That is the last thing that they want. It is up to you to read the stockcharts and ferret out clues to what the stock is more likely, to do next. That is a better approach then, getting stale news that XYZ is being acquired in a merger at $50. Current price of the stock is $48. Very few traders would pay you $50 if you can find them. There is no value in that. By the time you get the reason, whatever it is, the big boys have already taken position. Far better to look for a strongly, trending stock, get in on the pullbacks to hopefully, ride it higher? You probably, will be right, 80% of the time and actually, make monies.
Read about market profile if you want to learn about dual continuous auctions. If you want to find stocks that make big moves then read about can slim by William o Neil or mark minivini.
Maybe Trading in the Zone might explain part of it. Some say charts can tell but most of the time after all had happened. I find Stan Weinstein's Stage Analysis helpful sometimes. CBOE - 2017 to early 2018. Recently, FSLY, OSTK and TSLA just to name a few. Once the advance and decline start to increase with higher volume, look out! To each, his or her own.