PDSnet Glossary

Term

Categories

Introductory Technical Fundamental Economics Opinion Sectors International Regulatory Other Markets

Versions

Name	synonyms = 1, variations = 2, abbreviations = 3

Publish: (0 = no, 1 = yes)

Definition

A social science is an academic discipline which attempts to quantify some aspect of human behaviour. The obvious examples are psychology and economics. Both of these disciplines attempt to measure human behaviour and come to conclusions. The problem is that human behaviour is infinitely variable. For this reason, in the social sciences, the larger the size of the sample in any experiment, the more reliable the results. No psychologist would come to firm conclusions after conducting an experiment with just a single subject - because that subject might be a psychopath or have some other personality disorder. The general rule is the larger the sample, the more reliable the result. This is applicable to technical analysis - which is also a social science. It is the study of group investor behaviour. And in technical analysis, the size of the sample is the volume traded. Thinly traded shares can be thrown one way or another by a single investor getting into or out of the share. With a heavily traded share (like Sasol) the activities of individuals are lost in the overall direction of the trend. Thus the more heavily traded a share is, the more technically reliable it becomes. Indexes are more technically reliable than individual shares and so on.

Edit Glossary Term