Research On Futures Investment Strategy Using Behavioral Finance

Traditional economic theory based on EMH(efficient market hypothesis) and the two hypotheses-rational agents, so that lots of economic theories had came into being. As a branch of it, finance aimed to research on rules of market and rules of trading. Traditional financial theory assumed that investors can perfectly make rational investment decisions, Assumed that people can understand probability appropriately, Assumed that people can feel correlations between things well. Unfortunately people often were driven by their fear and desire to make non-rational decisions. This article try to find proof of predictably irrational in Chinese futures market. We collected some trading records of futures to confirm Prospect Theory, then we detect a strategy using.the predictably irrational, hoped to make money on futures markets.