ABSTRACT

In this article, we tried to make some considerations about the research done on efficient market hypothesis and behavioral finance, and anomalies of different trading strategies.

In the first part of our study we mentioned about relationship between Psychology and Behavioral Finance. Then, we explained how securities prices reflect all the information without giving a profit opportunity to investor. Furthermore we tried to answer the question of how the information takes place in different market forms. In addition to that, we studied on important concepts of behavioral finance models such as; the Expectations Theory, Expected Utility Theory, Rationality, Over-Confidence, Over and Under-reaction, Loss Aversion, Framing Effect, Disjunction Effect, such as Limits of Arbitrage Theory.

We touched to different trading strategies and tried to figure out these strategies with contribution of behavioral finance.we concluded that Momentum Strategy and Contrarian Strategies are more preferred by investors and academics.