Forecast in Capital Markets

Abstract

In the Schumpeterian technical disruption age, we firmly believe that a growing application of electronic computing technologies with the computations processing in the range of ultra high frequencies in the modern finances opens a big number of new unlimited opportunities toward a new era of the ultra high frequency electronic trading in the foreign currencies exchange markets in the conditions of the discrete information absorption processes in the diffusion - type financial systems with the induced nonlinearities. In this book, we would like to focus on the capital markets in the finances, discussing a number of scientific methods for an accurate forecast of the foreign currencies exchange rates during the ultra high frequency electronic trading in the foreign currencies exchange markets in the short and long time periods. Chapter 1 discuses the history of capital markets in the World, going from the academic literature. Chapter 2 reviews the existing approaches to the scientific analysis of the foreign currencies exchange markets. Chapter 3 explains an essence on the accurate characterization of the foreign currencies exchange rates at the ultra high frequencies electronic trading in the foreign currencies exchange markets. Chapter 4 focuses on the classic mathematical analysis methods, including the probability and the statistics, to accurately characterize all the trends in the foreign currencies exchange rates dynamics during the electronic trading process in the foreign currencies exchange markets in the short and long time periods. Chapter 5 considers the financial analysis methods, including the macroeconomic, the market microstructure and the order flow, to precisely forecast the foreign currencies exchange rates dynamics during an electronic trading process in the foreign currencies exchange markets in the short and long time periods. Chapter 6 uncovers the electronic analysis methods, including the Stratanovich-Kalman-Bucy filtering algorithm in the Stratanovich – Kalman – Bucy filter and the particle filter, to accurately estimate the time series and predict all the trends in the foreign currencies exchange rates dynamics during the electronic trading process in the foreign currencies exchange markets in the short and long time periods. Chapter 7 introduces the quantum analysis methods, including the wave function, to precisely forecast the foreign currencies exchange rates dynamics during the ultra high frequency electronic trading in the foreign currencies exchange markets in the short and long time periods, using the quantum system state prediction algorithm with both the wave function and the time dependent/time independent wave equation in the quantum finances theory. Chapter 8 proposes the quantum winning virtuous strategies creation algorithm with the quantum logic to earn an increasing return premium during the ultra high frequencies electronic trading in the foreign currencies exchange markets in the short and long time periods.

Keywords: absorption of information, diffusion of information, transmission of information, information theory, ultra high frequency electronic trading, processing frequency, algorithmic trading, informed trading, noise trading, currencies exchange rate, vehicle currency, interest rate, retail aggregator, liq

JEL Classification: G10, G12, G14, G15, G20, C40, D0, E42, F31