If technical analysis cannot prove profitable information to investors, markets satisfy

Question

Quizplus · Accepted Answer

Technical analysis involves using historical prices and volume patterns to predict future market movements. If technical analysis cannot provide profitable information, it suggests that all past trading information is already reflected in stock prices. This condition is consistent with weak form efficiency. Semi-strong efficiency asserts that all publicly available information is reflected in stock prices, making it impossible to gain an advantage through technical or fundamental analysis. Strong efficiency goes even further, stating that all information, public and private, is already reflected in stock prices, making it impossible to consistently achieve higher returns. Therefore, if technical analysis is not profitable, it could indicate that the market satisfies weak, semi-strong, or strong efficiency, hence all of the above.

If Technical Analysis Cannot Prove Profitable Information to Investors, Markets