Forum > View Topic (Poll)
What do you see happening with the S&P500 and/or Dow Jones Industrials Index in the upcoming 3-6 months?
Retesting Lows
Retesting Highs
New Highs First
New Lows First
A then B
B then A
View Poll..
This thread was started in response to the Poll:

Do you see New Highs or New Lows?

new york, United States
Posts: 0
Jun 12, 2021 11:00
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egypt, Egypt
Posts: 0
12 months ago
Jun 17, 2020 18:11

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Madison, United States
Posts: 0
1 year ago
Jun 3, 2020 15:32
Central, Egypt
Posts: 0
1 year ago
May 30, 2020 22:19

Random walk or Non-random walk for forex

The great debate continues between random walkers and non-random walkers. Two competing books best represent these theories. Originally written by Burton Malkiel in 1973, A Random Walk Down Wall Street has become a classic in investment literature. Malkiel, a Princeton economist, argues that price movements are largely random and that investors cannot outperform major indices.

Random walk vs Non-random walk and Free Forex Signals

Written by Andrew W. Lo and A. Craig MacKinlay in 2001, the appropriately titled A Non-Random Walk Down Wall Street provides the counter-argument. Lo, a professor of finance at MIT and MacKinlay, a professor of finance at Wharton, argue that price movements are not so random and that there are predictable components. Let the battle begin!

Random walk theory and Free Forex Signals

With "random walk," Malkiel claims that price movements in stocks are unpredictable. Due to this random walk, investors cannot consistently outperform the market as a whole. Applying fundamental analysis or technical analysis to market time is a waste of time that will simply lead to poor performance. Investors would be better off buying and holding an index fund.
Forex Signals

Malkiel offers two popular investment theories that correspond to fundamental analysis and technical analysis. On the fundamental side, the "Firm Foundation Theory" argues that shares have an intrinsic value that can be determined by discounting future cash flows (earnings). Investors can also use valuation techniques to determine the true value of a security or market. Investors decide when to buy or sell based on these valuations.

On the technical side and Forex Signals the "castle in the air theory" assumes that successful investing depends on behavioral finance. Investors must determine the mood of the market: bull or bear. Valuations are not important because a security is only worth what someone is willing to pay for it.

The random walk theory agrees with the semi-strong efficient hypothesis in its claim that it is impossible to consistently outperform the market. This theory argues that stock prices are efficient because they reflect all known information (earnings, expectations, dividends). Prices adjust quickly to new information and it is practically impossible to act on this information. Also, the price moves only with the advent of new information and this information is random and unpredictable.
Free Forex Signals
In short, Malkiel attributes any superior performance success to the lady's luck. If enough people try, some are likely to outperform the market, but most are likely to underperform.

Non-random walk theory and the best Free Forex Signals
A non-random tour of Wall Street is a collection of essays that provide empirical evidence that valuable information can be gleaned from security prices. Lo and MacKinlay used powerful computers and advanced econometric analysis to test the randomness of security prices. Although this book is a great read, the findings should be of interest to technical analysts and cartographers. In summary, this book documents the presence of predictable components in stock prices.

Just before this book, Andrew Lo wrote an article for the Journal of Finance in 2000: Fundamentals of Technical Analysis: Computational Algorithms, Statistical Inference, and Empirical Implementation. Harry Mamaysky and Jiang Wang also contributed. The newspaper's initial comments say it all:

“Technical analysis, also known as charts, has been part of financial practice for many decades, but this discipline has not received the same level of academic scrutiny and acceptance as more traditional approaches like fundamental analysis. One of the main obstacles is the highly subjective nature of technical analysis. The presence of geometric shapes on historical price charts is often in the viewer's eyes. In this paper, we propose a systematic and automatic approach to technical pattern recognition using non-parametric kernel regression and apply this method to a large number of EE stocks. USA From 1962 to 1996 to evaluate the effectiveness of technical analysis. When comparing the unconditional empirical distribution of daily stock returns with the conditional distribution conditioned by specific technical indicators, such as head and shoulders or double bottom, we found that during the 31-year sample period, several technical indicators provide incremental information and may have some practical value. Find more Free Forex Signals at

Ashraf Laidi
London, UK
Posts: 0
1 year ago
Apr 30, 2020 12:34
In reply to Pctrader1979's post

And that is why i created this poll, making these crucial distinctions (testing but not breaking). I would expect retesting the lows before hitting new highs.

Ashraf Laidi
London, UK
Posts: 0
1 year ago
Apr 30, 2020 12:31
In reply to will poho's post
Hi Will,

Yes, that seems to make sense. There was a Bloomberg survey of wealth managers saying their clients are waiting for another decline before buying. Many have missed buying those lows and are now desperate to get them back. Sort of like the 1987 low, which was never broken but only retested, leaving many to miss the rally.

Paris, France
Posts: 0
1 year ago
Apr 30, 2020 8:48
A then B. New lows before new highs.
Although I am not sure if we will reach new lows, but i would expect the market to tank again before new highs in the longer run will be reached.
will poho
Toronto, Canada
Posts: 20
1 year ago
Apr 30, 2020 6:00
Vote: Retesting Lows

retesting lows in order to get more participants in the market to make it a more sustained and robust up trend. Less volatility this way for a sustained run higher