Know about RWT
Also called asWeak Form of Efficiency.
Pricesare based on theinflow of news
which randomly occur in themarket.
Buying and selling information lead the
trader align with theintrinsic value.
Performed by Harry Roberts.
Examinetheappearanceof Dow Jones
index expressed in levelsand weekly
Changesaregenerated from random
numbers& then converted to graphs
depicting levelsof theDow Jonesindex.
• Examine by Moore in 1964.
• Correlate the price change in one week
to price change in another week.
• Price changes are correlated, points
plotted in graph tend to lie in the straight
• He considered avg correlation to be
0.06%, if low low tendency.
Stock movesup with percent Buy it and
it for along period.
When thesamepercent falls Sell it.
It Rangesfrom 0.5% to 50%.
For eg:- Assumefilter to be10%. Priceis
Rs20, Buy at Rs22 & reached till Rs30 &
fall, Sell at Rs. 27.
It is a set of consecutive prices of the
If increase “+” & decrease “-”.
Shares Number of Runs
+ + + + + +………2
- -+- + + +- - -….6