WhatDoYouDoInAMarket

ThoughtStorms Wiki

Context : OnMarkets

Traders in markets find things they can buy at one price, and sell them for more.

In PredictionMarkets, they buy "futures", ie. future price or representation of a piece of information in the future.

There seem two stratgies for trading :

simply use information already in the market, by watching trends (or other patterns) in prices, and make predictions based on these trends.
use information currently outside the market, eg. if you know that there's a technological breakthrough coming or you think that a political event is likely to increase the price, then you figure that into your expectation. In doing so, your scrap of information is added to the overall belief of the market. In this way, markets are information aggregators.