Technical Trading Thoroughly Tested on Emerging Currencies
April 21, 2010 - Currency Trading, Technical Trading
Are “proven” technical trading rules reliable profit-makers, or artifacts of data snooping bias? In their April 2010 paper entitled “Illusory Profitability of Technical Analysis in Emerging Foreign Exchange Markets”, Pei Kuang, Michael Schröder and Qingwei Wang apply several tests to evaluate the decisiveness of data snooping bias in the past profitability of technical trading rules for ten emerging foreign exchange markets. These environments are arguably less intensively mined than many other financial markets. Using spot exchange rates in the selected markets over the period January 1994 to July 2007 to test 25,998 commonly used simple, pattern and complex trading rules (see the table below), they find that: Keep Reading