Work

Entropy Oriented Trading: A Trading Strategy Based on the Second Law of Thermodynamics

Year: 2007

Type: preprint

Abstract: The author proposes a finance trading strategy named Entropy Oriented Trading and apply thermodynamics on the strategy. The state variables are chosen so that the strategy satisfies the second law of thermodynamics. Using the law, the author proves that the rate of investment (ROI) of the strategy is equal to or more than the rate of price change.

Source: RePEc: Research Papers in Economics

DOI: 10.48550/arxiv.0705.2820

Author: Hirai, Yoichi

Institution: The University of Tokyo

Language: English

Topic: Financial Markets and Investment Strategies

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W1484784144

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