Brownian motion


A theory or model that is used to explain random motion. Traditionally, Brownian motion was developed to explain the random movement seen in suspended particles, but is commonly applied today to the stock market. Brownian motion is just one theory that attempts to explain stock market fluctuations, along with the random walk theory and Markov process.

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I did not like the Brownian motion model because I felt that it did not apply to our business, or our life.

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The brownian motion theory was less useful than expected as we wanted to discover the source for the changes in directions of stocks value.

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While some had written off the minor fluctuations in the market as Brownian Motion, we decided to dig deeper to see if there was some other underlying causes.

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