We examine the use and pro tability of technical trading rules in nancial markets by studying the Santa Fe Stock Market, an agent-based model of a stock market, in which traders make investment decisions by forecasting stock prices using technical and fundamental rules. We show that individual traders earn more by using technical rules, no matter what other traders do, so the use of technical t...

The paper proposes an application of Empirical Mode Decomposition in technical analysis. The EMD-candlestick is designed to replace the traditional candlestick as the signal generators in technical trading strategies to improve the profitability. We investigate a representative set of technical trading strategies, including moving average, trading range break-out, relative strength index, and i...

The profitability of chartist trading rules on foreign exchange markets is still under debate. Since simple technical trading rules may not adequately capture the complex phenomenon of chartist trading, this paper focuses on the prominent head-and-shoulder pattern as a representative trading rule which incorporates various „technical“ ideas such as smoothed trends, trend reversal, resistance le...

Stock trading system to assist decision-making is an emerging research area and has great commercial potentials. Successful trading operations should occur near the reversal points of price trends. Traditional technical analysis, which usually appears as various trading rules, does aim to look for peaks and bottoms of trends and is widely used in stock market. Unfortunately, it is not convenien...

Numerous studies in the finance literature have investigated technical analysis to determine its validity as an investment tool. This study is an attempt to explore whether some forms of technical analysis can predict stock price movement and make excess profits based on certain trading rules in markets with different efficiency level. To avoid using arbitrarily selected 26 trading rules as did...