The RainFall simulation shows how market prices can be random-and-trendy at the same time. Daily returns are simulated as random precipitates from a probability density function. The mean and variance of the probability distribution determine the direction and volatility of returns.
Functions with positive mean generate cumulative uptrends. Negative means generate cumulative downtrends. Functions with large variance generate high-volatility, and small variance generates low-volatility.
The simulation holds the density functions constant for 60 days at a time. In actual market behavior, the relevant distributions are subject to change at any moment.
Open the simulation here to launch on-site, or download for later use. (If downloading for local use, simulation currently runs only in Windows environment.
Note; the simulation display will blank and fill your screen upon launch; your normal (current) window display will return upon exit. This simulation runs four segments of approximately 30 seconds between holdpoints for the user.
To launch the Rainfall simulation, click here, then click "Open" in the pop-up. When done, return to Simulations, or use Navigation field at left.