Does Technical Trading Work for Certain Kinds of Stocks?
September 18, 2006 - Technical Trading
Can technical traders make money if they focus on stocks that are small, illiquid or in specific industries? In their September 2006 paper entitled “Is Technical Analysis Profitable on U.S. Stocks with Certain Size, Liquidity or Industry Characteristics?”, Ben Marshall, Sun Qian and Martin Young test three widely used technical trading rules: (1) the variable length moving average rule: (2) the fixed length moving average rule; and, (3) the trading range break-out rule. Using daily close data for 1,065 NYSE and NASDAQ stocks trading over the entire period 1990-2004, they find that: Keep Reading