Predicting Stock Price movement statistically. Here we use historical data to predict the movement of stock price for next day. It is completely mathematically valid.
The mathematical model of Brownian motion has several real-world applications. Stock market fluctuations are often cited, although Benoit Mandelbrot rejected its applicability to stock price movements in part because these are discontinuous.
This is a momentum indicator used in technical analysis, which compares the stock’s closing price to its price over the course of a particular time frame. During an upward trend in the market, a stock’s share price will close near its high (highest price traded), and when in a downward-trending market, the security’s price will close near the low (lowest price traded). This may determine whether a stock is overbought or oversold, thus predicting a possible momentum change. Check out Ebook “Mind Math” from Dr. Garg