Stock market modelling with use of George Soros's theory of reflexivity: peculiarities and trends

Abstract

The article focuses upon reflexive processes in the stock markets. The theoretical and practical roots for the processes' emergence and their peculiarities are studied. The given research is based upon the findings of the reflexivity theory's founder, a well-known scientist and financier, George Soros. In particular, his concept of the reflexive interrelation between the expectations of participants, the market's reaction and its quotations' volatility are analyzed. The reflexive model interpreting the upward and downward trends' cycles in the securities' markets is also illustrated. Furthermore, the given article indicates the opportunities for the market situations' modeling and stock assts' prices forecasting using the reflexivity theory