Reflexivity_The What 3

Reflexion is a concept that incorporates the concept of likelihood of prevailing and the degree of prevailing of a perceived event.

Often there are quite an amount of probabilistic events that could take place at any single time. Any probabilistic event is in fact an outcome of people’s biases and limitation of rationality. The occurrence of probabilistic events is inevitable as every single second people have to make a lot decision that could alter the outcome. Explaining this, it is also vital for people to understand that, of course, probabilistic events also included unforeseen circumstance brought about by the nature elements.

The probabilistic event that has the highest chance to prevail simply means that most of the people have reached to a certain degree of bias consensus. Or precisely, it is the similarities in the very much vary biases that have reached people to a consensus.

Differences in bias, to some extent, create an effect that is of opposite direction. In fact, this is what helps categorizing people into different types of extremists.

The similarities in biases of people push the biases & distortions to its peak. The time taken for the biases to reach to the peak vastly depends upon the degree of similarities of the biases. The linear relationship between the two explains that when the degree of similarities is higher, then bias consensus will reach faster.

Higher bias consensus pushes prevailing bias to its peak, which leads to higher visibility the distance in between truth and distorted fact, will be identified and ultimately subjecting itself to a near term correction.

That being explained, it also means that higher bias consensus not only pushes prevailing bias to its peak, it also directly hasten the time period of which correction may begin. This by high chance will also create an exponential effect in the degree of correction.

To be more precise, the degree of correction has high chance of being caused by the degree of bias consensus.

The failure to reach to a bias consensus causes the market to prevail sideways, as extremist each has numerous plausible important factors to defend their own stance. This failure to reach to a bias consensus may only sustain for a short period of time for the flow and update of information in the new world is tremendously rapid. As you can see then, the updates of information contributes to the enhancement of weakening of one’s biases.

It is also important to know that people generally do not favor market that goes sideways. It is because it will fog up the visibility of market direction. This causes disturbance of emotions in people especially to those who lack of patience, causing them to take actions that maybe are not adequate. These spasms had little good, for it will again further smoke the visibility of market.

Reflexivity_The What 3