When money is placed on a financial market, such as the forex, the goal is to generate a return on investment. Many traders strive not only to profit, but also to outperform and beat the market.

However, the market efficiency hypothesis suggests that all prices fully reflect the information available for a specific asset or market at all times. According to the efficient market hypothesis, no investor has a real advantage in predicting market behaviour because no one has access to relevant information that others do not.

The nature of the information should not be limited to economic indicators and financial news alone; in fact, information about politics, economics, and social events, as well as how traders perceive this data, whether real or rumour, will affect the market price of the asset. According to the efficient market hypothesis, because prices only react to market information and all market participants have access to the same information, no one has the opportunity to outperform others.

Market efficiency refers to the degree to which market prices reflect all available, relevant information. In an efficient market, asset prices quickly adjust to new information, making it difficult for investors to consistently achieve returns above the average market performance through arbitrage or other strategies.

There are three forms of market efficiency:
1. Weak Form: Prices reflect all past market data.
2. Semi-Strong Form: Prices reflect all publicly available information, including past data and new public announcements.
3. Strong Form: Prices reflect all information, both public and private.

Efficient markets imply that no investor can consistently outperform the market through expert stock selection or market timing, as any new information is instantly priced in.