I am writing a part in my thesis about the random-walk theory of price changes. I plan to set up a runs test of randomness to show whether the price changes do follow a particular random pattern. I have computed the number of runs for each '+' or '-' movement, and the number of observations is 15,000 and shown that it is a normal distribution. I have read that this can be done using a one-tail test and I plan to use a significance level of 5%.

However, the library I am using to test this doesn't appear to be working properly. So my question is, what are the steps of conducting this test so I can show the calculations as they happen?


Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Browse other questions tagged or ask your own question.