| The Efficient Market Hypothesis (EMH) states that price fluctuations of financial products or goods are unpredictable from the historical time series of those changes. Indeed, all available information is included in these prices, which build the consensus between fully rational agents that would otherwise immediately arbitrage away any deviation from the fair value.
Thus, there is no way of making a profit on an asset by simply using the recorded history of its price fluctuations and the price is at any instant the best prediction of future values.
Then, price history is essentially random. When one inspects real time series for major world indices, appears to be so... the EMH is a useful paradigm but it must be adapted and some arbitrage opportunities are still possible. In the following, we discuss trading over time scales, from a few days to one week or more...
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