Wednesday, 5 May 2010

On markets and quantum mechanics

Tyler has studied the field of physics, and has worked in finance for some time. In one of his lazier, possibly beer-soaked musings it occured to him that there are many great similarities between them.

It is well known that many maths geeks work in the city already, and that the the Black-Scholes (option) model is really just a diffusion equation. But is there more between them than we see at first glimpse?

It occurs to me, that quantum energy levels of electrons in an atom look very much like fibonacci projections many chartist traders also seems to me that many options, or levels of a market, create their own momentum - almost like gravity.

Those levels, especially big binary options can also act as barriers, requiring a certain "energy" to overcome, then leave the market orbiting that level for quite some time afterwards. There is the push and pull of opposing forces around certain levels, and the volume increasing in the process which remind me of charging capacitors.....

Am I on to something here or am I jsut going crazy?

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