A Technical Approach To Trend Analysis: Practical Trade Timing for Enhanced Profits

Types of EMH in Theory

Studies of the efficient market theory have led to a breakdown into three distinct types: weak, semi-strong, and strong. The weak form observes that prices reflect all publicly known information from the past. In the semi-strong version, the belief is expanded to include both past and current information and, further, that traded security prices change instantly so that the current price always reflects all known information. The strong form of EMH expands to the belief that prices also reflect insider information not known to the investing public.

These distinctions all raise a key question about the efficiency of the market. Does it include any distinction between reliable or true information versus rumors that may end ...