Laws Of Trend Dynamics by Dirk Vandycke
Trends are always present in the markets. In the third part of this series, we explore the forces behind price movements during trends and identify those with explosive price movements.
Last month, I wrote about price gravity, which is the presence of power laws and nonlinearity in the markets. This month, we can move on to understanding inertia, or the dynamics of trends in the markets. We know only too well that trends exist in the market, but there’s more to them than their existence.
THE MARKET'S ALWAYS RIGHT
Over the past half century, financial academic research was focused on the efficient market hypothesis (EMH) with regard to subjects such as risk assessment, option pricing, portfolio allocation, and optimization...