Learn about why there are strong conceptual differences between the efficient market hypothesis and technical analysis about the role of historic price data.
 | | THE SKEPTICS: DOES TECHNICAL ANALYSIS ACTUALLY WORK? | | Thank you for subscribing to the Investopedia Technical Analysis email course. In parting, it's only fair to make you aware of the arguments against technical analysis. Some people firmly believe that it's fool's gold. | | For example, if you are a proponent of the Efficient Market Hypothesis, you believe that the stock price is basically "correct" and that it is impossible to beat the market. If you are a technical trader, however, you are implicitly rejecting this theory. Therein lies the controversy as to the efficacy of technical trading. Critics disagree with the three assumptions on which technical trading is based: | | 1. The market discounts everything. | | 2. Price moves in trends. | | 3. History tends to repeat itself. | | The controversy about the validity of technical analysis is pretty fascinating. Reading up on it will help you suss out where you stand on the fundamental-technical continuum, read more. | | Weak Form Efficiency | | Weak form efficiency is one of the degrees of efficient market hypothesis that claims all past prices of a stock are reflected in today's stock price. | | Read Now » | | |  | | | | CONNECT WITH INVESTOPEDIA | | | | | | | |
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