Home > Term: Fractal Market Hypothesis
Fractal Market Hypothesis
The fractal market hypothesis states that (1) a market consists of many investors with different investment horizons, and (2) the information set that is important to each investment horizon is different. As long as the market maintains this fractal structure, with no characteristic time scale, the market remains stable. When the market's investment horizon becomes uniform, the market becomes unstable because everyone is trading based upon the same information set. Theory due to Ed Peters.
- Part of Speech: noun
- Industry/Domain: Financial services
- Category: General Finance
- Company: Bloomberg
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