Random walk model for exchange rate forecasting
Explain about random walk model for exchange rate forecasting. Will it be reliable with the technical analysis?
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Random walk model may predict that the present exchange rate can be the best interpreter of future exchange rate. Effect of model is that the past history of exchange rate is not at all important in predicting the future exchange rate. The model therefore does not go along with the technical analysis which tries to use the past history for predicting the future exchange rate.
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