 Can channel pattern trading be profitably automated?M. A. H. Dempster and Charles Jones The European Journal of Finance, 2002, vol. 8, issue 3, 275-301 Abstract: Financial markets, such as the global foreign exchange (FX) market, often exhibit trending behaviour. Within such trends, the market level oscillates with changes in market consensus. Continued oscillations of this type result in the formation of wave patterns within the underlying trend known as channels, which are used by technical analysts as trade entry signals. A sample space of such channels has been constructed from a set of US dollar/British pound Spot FX tick data from 1989-1997 using pattern recognition algorithms and the profitability of trading using such patterns has been estimated. A number of attributes of the resulting collection of channels has been subjected to statistical analysis with the aim of classifying patterns that can be traded profitably using a number of simple trading rules. Results of this analysis show that there exist statistically significant links between the channels' attributes and profitability. Keywords: Technical Analysis; Technical Trading; Currency Trading; Intra; High Frequency Financial Data; Multivariate Discriminant Analysis; Pattern Recognition (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:eurjfi:v:8:y:2002:i:3:p:275-301 Ordering information: This journal article can be ordered from DOI: 10.1080/13518470110052831 Access Statistics for this article The European Journal of Finance is currently edited by Chris Adcock More articles in The European Journal of Finance from Taylor & Francis Journals |
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