Technical Analysis and Financial Asset Forecasting

From Simple Tools to Advanced Techniques

Technical analysis is defined as the tracking and prediction of asset price movements using charts and graphs in combination with various mathematical and statistical methods. More precisely, it is the quantitative criteria used in predicting the relative strength of buying and selling forces within a market to determine what to buy, what to sell, and when to execute trades.

This book introduces simple technical analysis tools like moving averages and Bollinger bands, and also advanced techniques such as wavelets and empirical mode decomposition. It first discusses some traditional tools in technical analysis, such as trend, trend Line, trend channel, Gann's Theory, moving averages, and Bollinger bands. It then introduces a recent indicator developed for stock market and two recent techniques used in the technical analysis field: wavelets and the empirical mode decomposition in financial time series. The book also discusses the theory to test the performance of the indicators and introduces the MATLAB Financial Toolbox, some of the functions/codes of which are used in our numerical experiments.

Contents:

• Classical Technical Analysis:

  • Introduction to Technical Analysis
  • Primary Tools for Technical Analysis
  • Chart Pattern Reading — Trend, Trend Line and Trend Channel
  • Chart Pattern Reading — Identifying Important Chart Patterns

• Filtering Tools in Technical Analysis:

  • Linear Filters
  • Momentum Indicators
  • Profitability of Momentum Indicators
  • Wavelets and Technical Analysis
  • Empirical Mode Decomposition and Technical Analysis

• Other Indicators in Technical Analysis:

  • Gann's Theory Unraveled
  • Bollinger Bands
  • Other Technical Analysis

Readership: Undergraduates, postgraduates, and researchers in the fields of technical analysis and financial markets.