Trader_M comments on Markets are Anti-Inductive - Less Wrong

30 Post author: Eliezer_Yudkowsky 26 February 2009 12:55AM

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Comment author: Trader_M 27 February 2009 12:30:26PM 0 points [-]

It all depends on where the market price is. There is a theory formed by a relatively respected speculator called "reflexivity," basically that markets tend to perpetuate trends and overshoot fair values

Yes, this is how I make day trading profits. Wait until there is a big crowd on the "wrong side" of the trade, watch for the signs of them starting to panic, and make $$$ when they all go stampeding through the doorway driving the price in your direction. This is a good example.