Random Walk Theory – What is Random Walk Theory?

What is Random Walk Theory?

Definition of Randoms Walk Theory
: It can be explained as an efficient market theory that states the costs of a stock, commodity or currency that continues on a casual basis compared to the intrinsic cost. This theory states that the cost of an asset includes all popular information and imagines that the capability to predict the future cost behavior is impossible. Generally, critics and academics utilize this theory to dismiss the validity of a technical analysis to utilize the earlier pricing movements to predict the future of the markets. Paul Cooner invented this theory in the year 1964 by using the theory of a well-organized marketplace, the one that incorporates all the recent information to set the existing costs. The trading market is generally regarded as an efficient market. Every market has randomness but also has the chagrin of the politicians and academics, markets generally move in different patterns. These patterns react to the physical laws leading the behavior of the forces and technical analysis depends on the laws to the cost behavior.