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Entropy, the Information Processing Cycle, and the Forecasting of Bull and Bear Market Peaks and Troughs

Entropy, the Information Processing Cycle, and the Forecasting of Bull and Bear Market Peaks and Troughs

Edgar Parker
Copyright: © 2019 |Volume: 7 |Issue: 1 |Pages: 14
ISSN: 2160-9837|EISSN: 2160-9845|EISBN13: 9781522567929|DOI: 10.4018/IJPMAT.2019010105
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MLA

Parker, Edgar. "Entropy, the Information Processing Cycle, and the Forecasting of Bull and Bear Market Peaks and Troughs." IJPMAT vol.7, no.1 2019: pp.77-90. http://doi.org/10.4018/IJPMAT.2019010105

APA

Parker, E. (2019). Entropy, the Information Processing Cycle, and the Forecasting of Bull and Bear Market Peaks and Troughs. International Journal of Productivity Management and Assessment Technologies (IJPMAT), 7(1), 77-90. http://doi.org/10.4018/IJPMAT.2019010105

Chicago

Parker, Edgar. "Entropy, the Information Processing Cycle, and the Forecasting of Bull and Bear Market Peaks and Troughs," International Journal of Productivity Management and Assessment Technologies (IJPMAT) 7, no.1: 77-90. http://doi.org/10.4018/IJPMAT.2019010105

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Abstract

Many econophysics applications have modeled financial systems as if they were pure physical systems devoid of human limitations and errors. On the other hand, traditional financial theory has ignored limits that physics would impose on human interactions, communications, and computational abilities. The entropic yield curve blends the physical and human financial worlds in a new, powerful, and surprisingly simple way. This article uses this information theoretic perspective to provide a new explanation of the dynamics and timing of financial cycles. Additionally, the entropic yield curve offers a new method of forecasting market peaks and troughs.