search query: @author Chang, P. / total: 5
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| Author: | Chang, P. Osler, C. |
| Title: | Methodical madness: technical analysis and the irrationality of exchange-rate forecasts |
| Journal: | Economic Journal
1999 : OCT, VOL. 109:458, p. 636-661 |
| Index terms: | ECONOMICS EXCHANGE RATES FORECASTING |
| Language: | eng |
| Abstract: | Substantial empirical research documents that exchange-rate forecasts are not formed rationally. This paper identifies a common technical trading signal, the head-and-shoulder pattern, as a potential source of departures from rationality in exchange-rate forecasts. Forecasts based on this pattern are evaluated for daily dollar exchange rates over 1973 to 1994, using two criteria for rationality: profitability and efficiency. Resulting profits, replicable in real-time, are tested for statistical significance using a bootstrap technique. |
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