the Market Soul © 1999 - 2011 Headlines

Monday, 19 September 2011

The Market Equation

Please note:  This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License. To view a copy of this license, visit or send a letter to Creative Commons, 444 Castro Street, Suite 900, Mountain View, California, 94041, USA.  If you would like to speak to the author about any aspect of this work, or in order to contribute towards developing the framework and ideas further, please click on the Contact Us link.  (We acknowledge and reward valued contributions).

The Market eQuation (MeQ):

Today we are commencing our investigation and outreach to discover what we will call the Market Equation.

Basically the idea is to come up with a mathematical equation and rating or ranking system to assess the state and status of various markets.

Whether this will lead to a theory of Markets that can compete with some of the other theories in existence is open to debate.

The basic premise is this:

There should be a methodology to access the Openness and Fairness of any given market versus other comparable markets.  This specific ratio or result should therefore determine the individual participant’s level of engagement and commitment to that specific market.  The result should also be able to be repeatable over time in order to elicit trends and movements of particular markets relative to each other.

The basic equation can be expressed as MA2R4K2E3T3 = OF outcome (Open & Fair).


OF = (A)2 x (R)4 x (K)2 x (E)3 x (T)3

And derives from the Market Equation Table listed below:

The Market Equation Table

Subjective measure
Objective (External)  measure

MA2R4K2E3T3 = OF outcome

Therefore: OF = (A)2 x (R)4 x (K)2 x (E)3 x (T)3

The subtler reader might already have seen through this equation.  Because by dropping the M (which will always be 1) the letters that remain result in the word raket if unscrambled which in effect is:

RACKET or not?  With the additional C being the complex bit so ultimately the Market Equation becomes a COMPLEX RACKET.

theMarketSoul ©2011

No comments: