Function F: Simple Explanation with Heat Graph

The F formula is a valuable starting point, but it’s far from definitive. It shows us that when the speculative component dominates, the predictability index plummets—just like a student who tries to cram everything at the last minute and ends up lost when faced with a question requiring deep understanding. In the same way that spaced repetition and conceptual grasp reduce exam panic, the market needs mechanisms to curb ultra–short-term behavior and keep SV at low levels.

To put this into practice, we can adopt measures akin to a solid study plan. Fees on high-frequency trades act like a rule forcing the investor to pause and think before clicking “send order,” just as an exam timer makes a candidate manage their remaining time more carefully. Position limits and higher margin requirements serve as mandatory review checkpoints, filtering out purely speculative moves and encouraging the construction of value-based portfolios.

Financial education plays the role of quality teaching materials: without it, even the most sophisticated formula ends up applied mechanically and incorrectly. Training programs that teach how to distinguish fundamental analysis from speculative maneuvering create investors who assess risk with the same confidence as someone who has mastered a subject before an exam. When SV falls, F naturally rises, because the “crutch” of opportunistic transactions loses strength in favor of well-grounded decisions.

Circuit breakers and automatic halts are the equivalent of “ten minutes left to submit your exam” warnings—a brake that gives time to review one’s reasoning instead of acting on impulse. Real-time transparency tools—such as immediate flow reports and order-book aggregation—function like partial answer keys, helping the investor grasp the full landscape before making a mistake. These devices reduce sudden price shocks and make the environment more predictable.

Without such measures, the market suffers volatility spikes, flash crashes, and artificial booms that inflict abrupt losses and erode confidence—much like an exam candidate who panics and quits. By ensuring low levels of speculation, we give investors the certainty they need to make well-reasoned decisions, just as a well-prepared candidate feels mastery over the material and answers any question calmly. It is in this convergence of regulatory discipline, financial education, and market architecture that SV stays controlled, driving F toward the ideal of predictability.