The "Weak Form Efficiency" is a concept in financial economics that refers to the idea that all past market prices are fully reflected in current prices, and therefore, cannot be used to generate excess profits.In other words, the weak form efficiency states that it is impossible to profit from past price movements in the market, because all historical price information is already incorporated into the current price of an asset. This means that technical analysis, which involves using past price patterns to make predictions about future price movements, is not likely to be successful.The weak form efficiency is one of three forms of market efficiency, with the other two being semi-strong form efficiency and strong form efficiency. The weak form efficiency only considers the information contained in past prices, while the semi-strong form efficiency also considers publicly available information. The strong form efficiency, on the other hand, considers all information, including both public and private information.The weak form efficiency is used in various ways in finance and investing.For example, it is often used as a basis for developing mathematical models and algorithms for pricing financial instruments. Additionally, it is used to evaluate the performance of technical analysis and other forms of market analysis, such as fundamental analysis.In conclusion, the weak form efficiency is the idea that all past market prices are fully reflected in current prices and cannot be used to generate excess profits. It is used in various ways in finance and investing, including the development of pricing models and the evaluation of market analysis methods.
