Thank you for purchasing an indicator or bundle from Kenzing®. This brief introduction contains instructions on how the indicator functions and how to adjust the input values that allow you to personalise the indicator according to your trading strategy. Information on how to access the indicator after purchase is not included in this document and can be found in the Read Me FAQ document.
Understanding the Random Walk Simulation
This indicator randomly generates alternative price outcomes derived from the price movements of the underlying security. Monte Carlo methods rely on repeated random sampling to create a data set that has the same characteristics as the sample source, representing examples of alternate outcomes. The data set created using random sampling is called a “random walk”.
First, every bar in the time stamp is measured logarithmically and put into a population.
Then, a sample is drawn at random from the population and is used to determine the next price movement of the random walk. This process is repeated fifteen times to visualize whether the alternative outcomes lie above or beneath the current market price of the security.
Visual representation of 15 random walks against Microsoft Corporation (NASDAQ:MSFT)