Identification through technical analysis: A study of charting and UK non-professional investors

Philip Roscoe and Carole Howorth

Accounting, Organizations and Society, 2009, vol. 34, issue 2, pages 206-221

Abstract: The usefulness of technical analysis, or charting, has been questioned because it flies in the face of the [`]random walk' and tests present conflicting results. We examine chartists' decision-making techniques and derive a taxonomy of charting strategies based on investors' market ontologies and calculative strategies. This distinguishes between trend-seekers and pattern-seekers, and trading as a system or an art. We argue that interpretative activity plays a more important role than previously thought and suggest that charting's main appeal for users lies in its power as a heuristic device regardless of its effectiveness at generating returns.

Date: 2009

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Persistent link: http://EconPapers.repec.org/RePEc:eee:aosoci:v:34:y:2009:i:2:p:206-221

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