A Markov Chain Prediction Model on a Major Pair in the Currency Market

The Markov chain prediction model is a type of stochastic model and very useful in predicting prices of stocks and exchange rates with outcomes that appear to be random in nature due to many factors that influence the price movement. The uncertainty in the price of the stocks and exchange rates arose. from the many factors, which include the economy of the region, financial and economic news of other regions, exchange rates, etc. This study tries to predict the price action using the Markov chain prediction model applied to the difference in the typical price and closing price of the daily exchange rates. The model is applied to the European Euros and United States Dollar (EURUSD) currency pair in the currency market. The model works well with the euro and United States dollar (EURUSD).