Agent-based models

Agent-based models have been used to simulate financial markets. The idea is to capture the complex dynamics of a large diversity of investors and traders with different strategies, different trading time frames, and different investment goals. If you want to see an agent-based model at work, you can download a free evaluation edition of Altreva’s Adaptive Modeler software. It’s lots of fun to play with. I am not promoting the software; I’m just trying to highlight yet another approach to the markets.