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- Title
STOCK PRICE BEHAVIOR AND TRADING.
- Authors
Seelenfreund, Alan; Parker, George G. C.; Van Horne, James C.
- Abstract
The article focuses on the random walk theory of stock price behavior which posits that past stock-price movements cannot be used to predict future market prices that would allow traders to profit from the predictions. If stock price movements were to become predictable enough that a profit were possible, proponents of the random walk theory argue that enough market participants would quickly recognize and exploit the pattern. These market participants compete enough to make all non-random fluctuations so small that they cannot be exploited for a profit. As a result, the trader would be as well off with a buy and hold strategy as he would with a mechanical decision rule based upon past price changes.
- Subjects
STOCK prices; RANDOM walks; FORECASTING; MONEY market; MARKET prices; MATHEMATICS
- Publication
Journal of Financial & Quantitative Analysis, 1968, Vol 3, Issue 3, p263
- ISSN
0022-1090
- Publication type
Article
- DOI
10.2307/2329813