efficient-market

Efficient Market Hypothesis

• Efficient-market hypothesis | Wikipedia
• Compare: Market Efficiency.

Levels of Market Efficiency

• Weak Form Efficiency
  • The market fully reflects all historical price and volume information.
  • Technical analysis becomes ineffective, since past patterns can’t predict future prices.
  • Fundamental analysis might still work to gain an advantage.
• Semi-Strong Form Efficiency
  • The market reflects all publicly available information.
  • Both technical and fundamental analysis based on public information won’t consistently generate excess returns.
• Strong Form Efficiency
  • The market reflects all information, both public and private.
  • In strong form, how do we continue to profit? High-Frequency Trading.