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Each positioning and market expectations dig into a much bigger idea of reflexivity inside monetary markets, as pioneered by George Soros. In brief, market reflexivity means that investor perceptions and conduct influence market circumstances, which, in flip, influence and form investor beliefs and actions. This round, self-referential suggestions loop results in non-linear market dynamics as cognitive biases and expectations construct on one another to influence market costs and investor positioning. This could clarify the emergence of worth tendencies that may turn into self-fulfilling over the brief run and self-correcting over the long term as merchants chase costs till expectations and positioning for continued worth strikes can solely lead to a reversal and correction, a lot to the frustration of merchants who just lately began following the development.
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