TECHNICAL ANALYSIS ON FOREIGN EXCHANGE: 1975 - 2004

Fernando Rubio Fernandez ()

Finance from University Library of Munich, Germany

Abstract: The aim of this paper is to determine the potential profitability of technical analysis applied on the foreign exchange market. Eight simple rules of trading are tested in five markets. Only long positions are tracked and reported. When neither commissions nor indexation are included in the analysis, some investment strategies outperform the index. There is little evidence that these excess returns are compensation for bearing excessive risk. However, the most of these strategies require too many transactions and produces only marginal returns. In that sense, when commissions and indexation are introduced, it is concluded that only an investor with the ability to get very low or null commissions and taxes would benefit.

Keywords: Technical; analysis; forex; exchange; rates; efficiency; trading (search for similar items in EconPapers)
JEL-codes: G10 G14 G15 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2004-05-29, Revised 2004-07-01
New Economics Papers: this item is included in nep-fin, nep-fmk, nep-his and nep-ifn
Note: Type of Document - pdf; pages: 11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpfi:0405033

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