Exploiting herding behavior in the markets

Discussion in 'Strategy Building' started by HillbrowFive, Jun 12, 2009.

  1. Hi all

    To exploit on herding created by technical traders (especially trend followers) in the markets, it would be great to know estimations of the fractions of technical vs. fundamental trading in the markets. Based on this, one would apply technical trend following methods only, when herding creates a self-fullfilling prophecy of the trend following approach - as indicated by an strongly increasing amount of technical trend followers in the markets.

    Does anyone know of sound (scientific) approaches to estimate the usage of technical vs. fundamental trading in the markets in the first place? So far, I've found www.whodrivesthemarket.com which estimates and publishes daily fractions of chartists and fundamentalists.

    Cheers

    Thomas