Stock Price Pattern Generator (Random Walk with Drift) - Patterns Look Like Real Price Charts
Much has been written about the price patterns of securities - are they defined by predictable processes or are they formed at random? Read about the subject at Random Walks in Stock Market Prices and Stock Market Prices Do Not Follow Random Walks.
This article does not discuss this debate, but it offers a model to help think about it.
The Stock Price Pattern Generator computes a series of prices using a random component. The resulting price charts look amazingly like real price charts. The generated charts include familiar patterns such as double tops and bottoms, head and shoulder tops and bottoms, pennants, triangles, bubbles, crashes and more.