random walk

Definitions

Banking

  • noun a sampling technique which allows for random selection within specific limits set up by a non-random technique
  • noun a movement which cannot be predicted, used to describe movements in share prices which cannot be forecast

Economics

  • noun the situation in which a variable changes in a way which is not dependent on previous changes. In sampling, it is a technique which allows for random selection within certain parameters set up by a non-random technique. It is also used to describe movements in share prices which cannot be forecast.

Forex

  • A popular idea in economics which holds that asset prices move in a completely random fashion up or down from their last observed point. The random walk theory implies that past price changes are not useful to indicate the direction of future price changes, although forex trend traders and technical analysts often disagree with this concept.
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