random walk theory

Definition

Stockmarket analysis theory that stock prices (and the capital markets in general) follow a pattern-less (random) path such as that of a drunkard's walk. Therefore, their future course is unpredictable and the best forecast of a stock's price is equal to its present value plus an unpredictable negative or positive random error. Proposed in 1900 by the French mathematician Louis Bacheiler it is explained as a Markov process, and is an antithesis of technical analysis. See also Brownian motion.

单词	random walk theory
释义	random walk theory Definition Stockmarket analysis theory that stock prices (and the capital markets in general) follow a pattern-less (random) path such as that of a drunkard's walk. Therefore, their future course is unpredictable and the best forecast of a stock's price is equal to its present value plus an unpredictable negative or positive random error. Proposed in 1900 by the French mathematician Louis Bacheiler it is explained as a Markov process, and is an antithesis of technical analysis. See also Brownian motion.
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