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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: Chip McVickar who wrote (275)6/24/1998 9:59:00 PM
From: Michael Friesen  Read Replies (1) of 3536
 
Chip et al,

The thing about population biology to remember is that even simple systems can become "chaotic" - butterfly effect, etc - which renders long-term prediction impossible. So applying it to economic systems would seem to have the same problem.

For example, one trader buys silver which provides the last tick required to set off a series of trend-following funds' stops. Even though the supply/demand is unchanged whether or not that one trader bought, the subsequent action alters participants' psychology which trickles into intermarket effects, etc.

Michael
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