The analysis of market dynamics theories
DOI:
https://doi.org/10.21847/1728-9343.2014.1(127).23081Keywords:
efficient market, coherent market, fractal market, synergistic market, technical analysisAbstract
The main aspects of market dynamics theories are considered in the article. There are 4 markets (efficient, coherent, fractal, synergistic) that can be used for time series forecasting. It is determined that efficient market hypothesis has some theoretical and practical disagreements, coherent market hypothesis is problematic in the practical application and the precise definition of the model parameters, synergetic market hypothesis has recently started its development and has not had acceptable practical application now (but it is a perspective direction of development of the market dynamics theory), fractal market hypothesis of E. Peters is the best in theoretical perspective and practical application now. It is analyzed the fractal market instruments for investment decision making. It is determined that the fractal market instruments give the theoretical basis for predicting possibility of financial markets in short periods using the methods of technical analysis that are trend-trading based. That is why the fractal market hypothesis and its instruments are chosen as the basis for further system building of financial time series forecasting. The choice of technical analysis tools, that are trend-trading based, according to the hypothesis of fractal market, particularly Elliott wave model and application of neuro-fuzzy models for forecasting financial markets are presented and substantiated for further researches.
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