If coffee market were an efficient market at 100%, the price we see in the screen, at anytime, should contain all the information about supply and demand and also containing the expectation of a future behavior of those forces. Then the best forecast for tomorrow's price will be today's prices nad tha will be it until some new event happens and distort the equilibrium, taking it to another equlibrium level
As far as I know there are some econometrics test ( strong,weak tests and others) to prove the efficieny of future markets and evaluate if the random walks hypothesis holds or not, however I haven't seen any serious studies for our coffee market. If someone has it please let us know
From a practical point of view and in IMO the random walk hypothesis doesn't hold. Several times we have discovered patterns and trends that works good and surely the errors in those lags series should have high correlations. So the RWH wouldn't hold and the coffee market will not be an efficient one
Nagual studies has proved us we need to live in a world attending the technicals.
Technicals, which are non econometrics statistcs technics and also econometrics models with ARIMA and VAR have help me at least to do not incur in errors type 1 (take innecessary risks o trade against the trend) nd many times to follow the trends. That is an asset but if the markets were totally efficient those tools were useless.
There is another thing why Random walks hypothesis (RWH)I believe does not hold. The idea of RWH is the all the information will be know for every body because also we are in a perfect market, but that is not true, there are same privilege information or inside information that some people have and get profits from that. The market could be quiet for sometime but suddenly moves for one direction ur another, then the market creates trends and System traders once it break out some levels do their work until the market get an extremely level of chaos and revert again.
I don't want to bore you more collegues, I will pass the ball to others
Have a good trading!
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