1. The Theory of Trends—Dow, EMH, and RMH in Context
Trends exist without doubt. But what is the nature of the trend? Some theories suggest the market is efficient, and others say it is random. Some say it is both efficient and random. The debate is not settled by any means.
This becomes confusing because not everyone will agree on the definition of the trend itself. A trend is the direction of movement or change in an observed value. In terms of stock charts, this usually refers to price. But is the duration of the change important as well? Every trader has to decide whether to adopt a short-term outlook, such as that of the day trader and swing trader who rely on fast price changes, or a long-term outlook based on the study of longer-term trends. ...
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