Traders who believe in the random walk theory believe that it is impossible to outperform the stock market and that attempting to do so would be extremely risky. Believers in the hypothesis typically employ a buy-and-hold strategy, as the theory suggests that long-term positions have the best chance of success.


Traders will seek a diverse selection of shares that best represent the entire stock market – exchange-traded funds (ETFs) and indices are popular instruments because they track the share prices of a variety of companies.