Last Updated on 21 September, 2020 by Therobusttrader
The Efficient market hypothesis (EMH) is the belief that market participants are rational decisionmakers that take into account all information that’s available to them. Therefore, the Efficient market hypothesis implies markets are always valued correctly, and that the market is 100% efficient.
However, one can with 100% certainty dismiss the efficient market hypothesis as an erroneous attempt to impose macroeconomic theory on microfinance. Markets are not 100% efficient, and there are countless of irrational behaviour and edges for market participants to take advantage of in their trading.