Calculating the Human Spirit: The Popularization of Day-Trading Outside the Global Centers of Finance

The paper looks at the popularization of day-trading in Israel. It presents a qualitative analysis of the calculative models and techniques that are promoted by financial trading schools, service firms, and books. Broadly, the popularization of day-trading in this field involves a focus on "technical analysis" (TA, aka "chartism"). Insisting that economic "fundamentals" are irrelevant to day-trading, popular TA promotes models that look at price charts as the trails and creators of socio-psychological "trends" in the market. Its techniques seek to predict the future shape of these "trends" shortly before they allegedly determine prices. These techniques are presented to the public as simple, intuitive, and easy to grasp. While TA has been studied before, the paper argues that researchers have not paid enough attention to its socio-psychological models; to the role of these models in the expansion of trading; and to the ways that they complicate existing theories of calculation.

Regarding the expansion of trading, TA's models shift the calculative focus from mathematical expertise to socio-psychological sensibilities and instincts. The promise of non-mathematical simplicity, however, is not the only factor that turns TA into such an appealing "consumption object" (Mayall, 2008). Another factor is that the socio-psychological models imply that trading can be profitable for anyone, regardless of global inequality or economic marginality. According to these models, traders do not have to be powerful, economically educated, or rich to profit from trading. What traders do need - besides an internet connection and a deposit to leverage - are techniques that help them identify the thoughts, emotions, and institutional logics of those who allegedly do have the power to shape markets (the "crowds," institutional investors, banks, etc); techniques that help them capture the socio-psychological trends that characterize other market actors before these trends determine price shifts.  

This socio-psychological ambition complicates existing theories of calculation. I will argue that popular TA is characterized by an emic awareness of "performativity" (Callon, 1998), but, for this reason, it also transcends it. In a sense, TA's awareness of performativity "reverses" economic materialization: its calculative attempt to trace materiality to the minds, hearts, and arrangements from which it had allegedly sprung as a means for foreseeing future price shifts "ideationalizes" the market. Appadurai's (2011; 2012) hidden "spirit of calculation" – his Weberian notion of a "ghost in the financial machine" – is thus no longer hidden: it is actively constituted and targeted. Tying the material and ideational aspects of calculation in a loop of sorts, the socio-psychological models of TA transcend our existing theoretical constructs. The paper discusses the theoretical implications of its case-study for our understanding of financial calculation and the global expansion of trading.

References

Appadurai, A. 2011. "The ghost in the financial machine." Public Culture 23 (3): 517-539.

Appadurai, A. 2012. "The spirit of calculation." Cambridge Anthropology 30(1):3-17.

Callon, M. (ed.) 1998. The Laws of the Markets. Oxford: Blackwell.

Mayall, M. 2008. "From seeing the market to marketing the seeing: Technical analysis as a second-order epistemic consumption object." Consumption Markets & Culture 11(3): 207-224.