Financial markets driven by trend followers, contrarians, and fundamentalists - what's next?
The article explains how speculators in financial markets use different trading strategies like following trends, going against the crowd, and focusing on fundamental factors to make decisions. By studying these behaviors, the researchers created a model that mimics the ups and downs of real financial markets, showing that prices often move randomly. When there are many speculators in the model, the randomness decreases, and a simple mathematical formula can predict how prices will change over time. This model helps us understand how financial markets work and why prices can be unpredictable.