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Support for Resistance: Technical Analysis and Intraday Exchange Rates
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In this paper, the authors used support and resistance levels provided to customers by six firms active in the foreign exchange market to predict intraday trend interruptions and found that the levels' predictive power varied across the exchange rates and firms examined.Abstract:
"Support" and "resistance" levels - points at which an exchange rate trend may be interrupted and reversed - are widely used for short-term exchange rate forecasting. Nevertheless, the levels' ability to predict intraday trend interruptions has never been rigorously evaluated. This article undertakes such an analysis, using support and resistance levels provided to customers by six firms active in the foreign exchange market. The author offers strong evidence that the levels help to predict intraday trend interruptions. However, the levels' predictive power is found to vary across the exchange rates and firms examined.read more
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The Microstructure Approach to Exchange Rates
TL;DR: In this paper, the authors focus on the economics of financial information and how microstructure tools help to clarify the types of information most relevant to exchange rates, and show how exchange-rate behavior previously thought to be particularly puzzling can be explained using the micro-structure approach.
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Currency Orders and Exchange Rate Dynamics: An Explanation for the Predictive Success of Technical Analysis
TL;DR: In this article, the first available data on individual currency stop-loss and take-profit orders were used to provide an explanation for two familiar predictions from technical analysis: (1) trends tend to reverse course at predictable support and resistance levels, and (2) trend tend to be unusually rapid after rates cross such levels.
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Extended evidence on the use of technical analysis in foreign exchange
TL;DR: The use of technical analysis has gained importance over time and is now the most equally spread kind of analysis as mentioned in this paper, which has by far the greatest importance in FX dealing and is second in fund management, while flows dominate at the shortest-term and fundamentals at longer horizons.
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The Profitability of Technical Analysis: A Review
Cheol-Ho Park,Scott H. Irwin +1 more
TL;DR: In this paper, the authors reviewed the evidence on the profitability of technical analysis and categorized the empirical literature into two groups, "early" and "modern" studies, according to the characteristics of testing procedures.
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The Profitability of Technical Stock Trading has Moved from Daily to Intraday Data
TL;DR: In this paper, the authors investigated how technical trading systems exploit the momentum and reversal effects in the S&P 500 spot and futures market and analyzed the performance of 2580 widely used models.
References
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The jackknife, the bootstrap, and other resampling plans
TL;DR: The Delta Method and the Influence Function Cross-Validation, Jackknife and Bootstrap Balanced Repeated Replication (half-sampling) Random Subsampling Nonparametric Confidence Intervals as mentioned in this paper.
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Simple Technical Trading Rules and the Stochastic Properties of Stock Returns
TL;DR: In this article, the authors used the Dow Jones Index from 1897 to 1986 to test two of the simplest and most popular trading rules (moving average and trading range break) by utilizing the bootstrap techniques.
Journal ArticleDOI
The use of technical analysis in the foreign exchange market
TL;DR: In this article, the results of a questionnaire survey, conducted on behalf of the Bank of England, among chief foreign exchange dealers based in London in November 1988, revealed that at least 90 per cent of respondents place some weight on this form of non-fundamental analysis when forming views at one or more time horizons.
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Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications
TL;DR: In this article, the authors present a thorough and accessible overview of the field of technical analysis, with a special emphasis on futures markets, for anyone interested in tracking and analyzing market behavior.
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The Significance of Technical Trading-Rule Profits in the Foreign Exchange Market: a Bootstrap Approach
TL;DR: In this article, the authors present new evidence on the profitability and statistical significance of technical trading rules in the foreign exchange market using a new data base, currency futures contracts for the period 1976-1990, and implement a new testing procedure based on bootstrap methodology.