Scribner Seminar Program
Psyching Out the Stock Market
Instructor(s): Pierre von Kaenel, Math and Computer Science
The financial markets are a “mind game.” Want to psych out other players? Human psychology plays a large role in determining prices in the markets. Traders and investors are influenced by government policies, business and economic conditions, politics and the human drama that unfolds each day in the business world. But what are the telltale signs that show how traders are reacting to these news events? Can these signs predict future price swings? Students will explore the use of technical analysis to study financial markets by examining patterns of daily, weekly, and monthly price ranges and volume when charted. They will see how other indicators based on price and volume are often used to confirm trends or to indicate divergences. To explore the effects of trading psychology and other forces on the markets, technical analysts rely on a collection of tools such as mathematical formulas to calculate indicators, software tools to perform calculations and display charts, intermarket relationships to predict how markets impact one another, and numerous other methodologies to predict future price trends. Students will explore these tools and determine how effective they are at predicting price trends.