ECHNICAL ANALYSIS AND THE RANDOM – WALK THEORY

3 important questions on ECHNICAL ANALYSIS AND THE RANDOM – WALK THEORY

An accurate statement of the “weak” form of the random – walk hypothesis goes as follows:

The history of stock price movements contains no useful information that will enable an investor consistently to out perform a buy – and – hold strategy in managing a portfolio.

Price – Volume Systems:

When a stock, or the general market, rises on large or increasing volume, there is an unsatisfied excess of buying interest and the stock will continue to rise.
Conversely, when a stock drops in large volume, selling pressure is indicated and a sell signal is given.

“The bull markets and bare knees” – Theory:

Investigating other movements in the stock market, besides price movements.

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