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Identification through technical analysis: A study of charting and UK non-professional investors

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  • Roscoe, Philip
  • Howorth, Carole
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    Abstract

    The usefulness of technical analysis, or charting, has been questioned because it flies in the face of the 'random walk' and tests present conflicting results. We examine chartists' decision-making techniques and derive a taxonomy of charting strategies based on investors' market ontologies and calculative strategies. This distinguishes between trend-seekers and pattern-seekers, and trading as a system or an art. We argue that interpretative activity plays a more important role than previously thought and suggest that charting's main appeal for users lies in its power as a heuristic device regardless of its effectiveness at generating returns.

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    File URL: http://www.sciencedirect.com/science/article/B6VCK-4T0X2K1-1/2/0826e06c0905f5d4d099513e08767710
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    Bibliographic Info

    Article provided by Elsevier in its journal Accounting, Organizations and Society.

    Volume (Year): 34 (2009)
    Issue (Month): 2 (February)
    Pages: 206-221

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    Handle: RePEc:eee:aosoci:v:34:y:2009:i:2:p:206-221

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    Web page: http://www.elsevier.com/locate/aos

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    References

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    Cited by:
    1. Vassili Joannides & Nicolas Berland & D. T. Wickramasinghe, 2010. "Post-Hofstede diversity/cultural studies: what contributions to accounting knowledge?," Grenoble Ecole de Management (Post-Print) hal-00676570, HAL.
    2. Lukasz Prorokowski, 2011. "Trading strategies of individual investors in times of financial crisis: An example from the Central European emerging stock market of Poland," Qualitative Research in Financial Markets, Emerald Group Publishing, vol. 3(1), pages 34-50, April.

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