Current state only dependent on previous state
Markov property is quite reasonable since physical reality also changes based on current state
However, the reason hidden states are necessary is because we need to understand trends in changes that cannot be predicted by current stock prices alone in order to incorporate them into the model parameters
The Markov assumption is a concept proposed by Russian mathematician Markov around 1913 to build a model for the sequence of letters in Russian literature
Markov Model Notion