The Socionomic Theory of Finance by Robert R. Prechter

Author:Robert R. Prechter
Language: eng
Format: epub
Published: 2018-09-21T14:00:00+00:00

Could Reflexive, Adapting, Evolving Markets Dissolve the Wave Principle?

The idea that markets adapt to the actions of individual agents has long led to a charge that if everyone started applying EW to speculating, WP would self-destruct. This view likewise derives from the mechanistic view of markets, under which reductionistic, bottom-up causality is the only operative influence. Since that is the wrong theoretical paradigm, we may be sure there is no chance the proposed outcome would happen. Practical thinking leads—as it must under any valid theory or philosophy—to the same conclusion, for numerous reasons: First, the robust nature of waves makes them only probabilistically predictable, leaving substantial leeway for alternative outcomes and opinions at every degree of analysis. Second, it takes study and practice to achieve success in market analysis and speculation, which a significant number of people will never achieve. Third, to alter Elliott waves in a financial market, individuals would have to bet on them en masse identically, and that will never happen because of points one and two. Fourth, such betting would have to be done emotionlessly and sans errors of laziness, greed and stupidity, which will also never happen unless humans turn into Spocks. We might personify the issue by saying that Elliott waves are more in control of their own behavior than participating individuals are of theirs. Fifth, whenever a financial market enters a major corrective period, predictive accuracy at all but the highest wave degrees recedes, pushing the potential for widespread agreement even further out of reach. By the time a correction induces people to give up on reading Elliott waves, an impulse emerges and waves become clearer again. Ultimately, the organic nature of the social-mood system assures that humans in the aggregate will never dominate, outsmart or eliminate Elliott waves.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.