Technical Analysis in Investing

Gil Cohen ()
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Gil Cohen: Western Galilee College, Acre, Israel

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2023, vol. 26, issue 02, 1-23

Abstract: Technical analysis helps investors to better time their entry and exit from financial asset positions. This methodology relies solely on past information on financial assets price and volumes to predict a financial asset’s future price trend. Modern research has established that combined with other sentiment measures such as social media, it can outperform the standard buy and hold strategy. Moreover, it has been documented that novice and professional investors technical analysis in their investing strategy. An experienced investor should combine fundamental analysis and technical analysis for better trading results. Programmers use technical analysis to create algorithmic trading systems that learn and adapt to the changing trading environments and perform trading accordingly without human involvement. There are hundreds of technical tools offered by known trading platforms. investors must use specific tools that fit their trading style and risk adoption. Moreover, different financial assets such as stocks, exchange trade funds (ETFs), cryptocurrency, futures, and commodities demand different sets of tools. Furthermore, investors should use these tools according to the time frame they use for trading. This paper will discuss different technical tools that are used to help traders of different time frames and different financial assets to achieve better returns over the traditional buy and hold strategy.

Keywords: Technical analysis; oscillators; support and resistance; Bollinger bands; linear regression; trend lines (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1142/S0219091523500133

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