Re: Random Walk
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If a security always trades at exactly its value, technical analysis cannot work. Why? Because technical analysis requires price fluctuations not based on the security's intrinsic value.
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This is not a good argument for why technical analysis can't work, for the simple reason that it is not true.
Price and volume trends simply capture a stocks intrinsic value as "perceived" by the totality of market participants.
A good trader will attempt to capitalize on the misperceptions of market participants, when those perceptions are wrong.
A short term trader will capitalize on the variance around the mean intrinsic value.
There are many ways to trade and there are many ways to value a business!
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