Live trapped mass of thinking?


Rationally behaving irrationally when the costs are too high rationality.
F. Knight

Thousands of investors regularly come to the stock market. Any layer of modern big business, regardless of the type of core business, has its own access to the stock market. This clearly can not be explained, because the effectiveness of raising funds through the issuance of securities in Russia are, unfortunately, not on the level. The level of development of the market infrastructure is determined by the amounts and the number of participants - the cost of the work. In other words, the whole mechanism of securities transactions depends on the cost of each trader.

Professional trader - a machine

Investors operating in the stock market at any time in the process of decision-making: to get out or stay, recorded a loss or wait for a turn, trust trading system or not. The objects of these reflections is a bargain.

The very process of the transaction occurs when the external and internal forces, pressing on the trader reach some compromise. This can be represented graphically. Various news and events (dashed arrows) are projected in the decision to buy or sell.

Subjectively, folding them, the investor determines the solution is right for them. Professional trader works like a machine: it waits confirming favorable input signals. The result of these signals appears as a binary random variable

  (Tetta): either the deal will be made (tetta = 1) or not (tetta = 0). Over time, the probability of the transaction will rush to unity:

So if we take the set of such binary tetta, you get a real and unpredictable market with their collisions, balance and failures.

Transaction has a transaction

What is the process of the transaction? From an institutional point of view, leading to an exchange of property rights transactions in the stock market is the transaction. According to the definitions developed by John Commons, the financial markets have the transaction deals. There are their main characteristics.

1. Both agents of economic relations have the same legal status as a reserve stock (inventories) of each one may be different. The difference is reflected in the unequal bargaining sile1.

2. Committed operations lead to a redistribution of wealth, because even at the time t0, at a cost of one share of 10 rubles, equivalent to 100 shares of 1,000 rubles, then at time

(Where) this identity can not be performed.

Therefore, ignoring the static approach, we can determine the nature of transactions on the stock market as redistributing wealth.

3. In the transaction take uchastie four sides, and it is easy to show: in the stock market, there is always two players with different expectations about future konyunktury2. One involves the growth of quotations, and the other, respectively - the decline. Each of them is always an alternative: either wait for a possible price change and implement the deal with the counterparty, or immediately go direct to the market-maker that automatically satisfy the request of participants.