DYNAMICSCORE◉ LIVE LAB

Random Walk & Markets

Unpredictable steps accumulate; efficient markets leave mostly randomness behind.

drift?
spread ∝ √time · recreated schematic

How it works

  • Each step is noise; position is the sum of all noise so far.
  • Spread grows with √time — wider, not wiser.
  • Skill shows only as a faint drift inside the wobble.
Use → Separate skill from luck before forecasting.
Watch out → Forecasting the wobble instead of the drift.
Try it → Fan out 30 walks in the lab, then add a small drift and see how hard it is to spot.
REDCAPE jobs → Reason · Predict
Free sources → SFI Random Walks tutorial • Coursera M9 (Randomness & Random Walks)
INTERACTIVE LABoriginal recreation — poke it
30 walks, 200 steps — dashed = ±2√t envelope
AVERAGE ENDPOINT
-2.4

A drift of 0.05 is real skill — yet single paths still wander both ways. Judge skill across many paths, not one.