Fractal markets hypothesis: Difference between revisions
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The FMH may explain why extreme negative (and positive) outturns are observed more frequently in real financial markets than predicted by simpler efficient market models. | The FMH may explain why extreme negative (and positive) outturns are observed more frequently in real financial markets than predicted by simpler efficient market models. | ||
Under the FMH, a key contributory factor is the difference in investment time horizons between different classes of market participants. | |||
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== See also == | == See also == | ||
* [[Efficient | * [[Efficient market hypothesis]] | ||
* [[Behavioural economics]] | |||
* [ | * [[Market risk]] | ||
[[Category: | [[Category:Corporate_financial_management]] | ||
[[Category: | [[Category:Financial_risk_management]] | ||
Latest revision as of 22:20, 19 March 2016
(FMH).
The fractal markets hypothesis is an evolving model of investor and market behaviour which identifies repeating patterns in market prices and conditions.
The FMH may explain why extreme negative (and positive) outturns are observed more frequently in real financial markets than predicted by simpler efficient market models.
Under the FMH, a key contributory factor is the difference in investment time horizons between different classes of market participants.
If the FMH is borne out in practice, then real financial markets are significantly less stable than predicted and described by more traditional market models.
