Oscillations of Plasma

[Ionized]

Thoughts on the markets as a physical system.

I made the following post as a response to someone who was claiming that there is no way to make predictions in the market that were 100% correct. I agree, however, the black art of TA allows one to assume probabilities...

"Charts are indeed useful. However it is up to the trader to determine what indicators are meaningful within specific context, and to apply the data in the chart properly to the situation at hand.

The market is a physical system. It is a complex, non-linear, open system whose dynamics can be understood by using more updated approaches to process-oriented physics. Indeed all those things you listed are variables that are part of the dynamics which define the system. Of course no model of a physical system can be 100% accurate under all circumstances, however under some conditions the system will have behavior that can be predicted within a range of probabilities. Stability is driven by periods of instability and bifurcation, hallmarks of a complex system, and understandable within the paradigm of non-linear, open-system, process theory. The econophysicists might be outcasts, but they should not be completely ignored."

The response I received was along the lines that one can never take into account ALL variables. I agree, to some extent. However the larger variables that are taken into account, do affect the system in ways that can be measured. I responded with this:

"Those things drive the periods of instability and bifurcation.
No one claims that charts predict the future under all conditions. If they did, they do not understand the physics that drive the system."

I determined it might be a good idea to further develop in more understandable language, what I meant with these ideas. Over time I might do so and if I succeed, I'll post them here ;)