Market efficiency
Also called: efficient market hypothesis, efficient markets, EMH
The idea that prices quickly reflect available information, so publicly known patterns cannot reliably earn profits after costs.
Markets are not perfectly efficient, but they are highly competitive, with many professionals searching for patterns. Research on technical rules has found some small effects in some markets and periods, often weakening once published, and many popular rules show little or no edge after costs.
Learn more in these lessons
- The limitations of technical analysisDoes technical analysis work?
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