Behavioral Analysis of Markets is a new area of study, proposed by James Gregory Savoldi, closely related to behavioral financebehavioral economics and socionomics.

Unlike traditional models of behavioral analysis which typically integrate insights from psychology with neo-classical economic theoryBehavioral Analysts of markets focus entirely on the psychology of actual market participants and how their present moods control market price movement.

Behavioral Analysts are divided into two groups.

One group believes that by studying current market psychology —as displayed in price action—future market psychology becomes predictable, while another group believes in limited predictability with the inevitability of occasional "Black Swan" events. Behavioral Analysts of Markets ignore traditional economic inputs in favor of the more empirical proof of intention through action displayed directly in market price movement. Pattern recognition and fractals play a small role in the behavioral analysts' toolkit as they use those technical analysis tools only to help predict potential market velocity as opposed to price reversals.

In behavioral analysis of markets, a topping and bottoming 'count' is tracked most similar to Elliott Wave Principle as waves of optimism and pessimism drive price. Data output created by human reaction to greed and fear thresholds is measurable, and through these measurements future market psychology can be predicted hours, days, weeks, months, years, and even decades before actual trading takes place. Behavioral Analysis uses clues created by today's emotional responses to market behavior in order to predict future market reversals.

According to the principles of Behavioral Analysis, events unfolding in today's financial markets are currently creating a map of the future that will be strictly followed regardless of any attempts through human intervention to change the outcome of price movement. The logic behind this assertion can be attributed to the fact that, regardless of lessons learned by previous generations, human beings seem predisposed to repeat both positive and negative behavior exhibited by past generations.

In fact, it is this dynamic that spawned the popular adage " history repeats itself.

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Because of this assumed "law of nature," market participants' reactions to future events—although dynamic in emotional extremes—will continue to elicit greed and fear, driven by the intrinsic human desire to pursue pleasure and to avoid painand that in turn will result in predictable repeatable reactions in financial markets.

Although these characteristics of " human nature " and their effect on traded markets are generally accepted by market participants, the ability to predict when these biggest oil futures traders will again surface—and the intensity with which they will move markets—is the goal of behavioral analysts.

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According to Behavioral Analysts, boom and bust cycles are cyclical and predictable, but not in the stock market psychology cycle history that the cycles are "fixed" or recurring in their time element as traditional data provided invest trading stocks account otech intraday work would suggest.

Financial market history teaches proves that it takes much longer for a market to recover from the bursting of a bubble than it does from a simple 'reaction' during a more moderate advance in prices.

Both booms and normal advances are cyclical in the sense that expansion is followed by contraction, but the extent and duration of the contraction phase should be anticipated to be proportionate to the extent and duration of the preceding advance.

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In this sense, cycles are generically predictable. Capitulation within capitulation marks ever-smaller data components of markets such that tick data and monthly data exhibit similar capitulation 5 minute luck binary options brokers. A market participant's ability to withstand pain losses will fluctuate on a second by second, minute by stock market psychology cycle history, hour by hour, day by day, week by week etc.

Even using a black-box discipline with fixed stop-loss controls, investment decisions are vulnerable to human emotion on various other macro levels. According to behavioral analysis, heavy losses come at times when emotional thresholds are super-resilient and therefore able to endure very high levels of pain, and small losses come at times when emotional thresholds are non-resilient and therefore unable to endure almost any level of pain.

This explains why the best, most disciplined traders in the world will occasionally let a loser run instead of immediately cutting his losses. This type of mistake is common and can be attributed to a temporarily elevated pain threshold. It is because of this tendency toward dynamic thresholds for pain lossesthat behavioral analysts use dynamic measurement components, that is, the ability to discern controlled capitulation from final capitulation.

According to behavioral analysis, only a dynamic measure can provide reliable results in predicting future emotional pain thresholds in human beings, because cycles in human resiliency clearly dictate that what may be viewed as highly painful on one day will register only as an annoyance on another day.

The study of behavioral analysis received increased attention after more traditional economic and market forecasting tools witnessed a high-profile failure during the financial crisis. Economist Robert Shiller—considered a pioneer in behavioral finance—has been credited with forecasting the US housing bubble and its subsequent crash. Many traditionally trained technical analystsfundamental analysts and economists are critical of behavioral analysis due to its relatively short track record and vague some would say secretive methodology.

The same criticism is often leveled at Elliott wave practitioners although that investing methodology has been in use for a much longer period of time.

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