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Towards New Technical Indicators for Trading Systems and Risk Management

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Author Info
Michel Fliess () (LIX - Laboratoire d'informatique de l'école polytechnique - CNRS : UMR7161 - Polytechnique - X, INRIA Saclay - Ile de France - ALIEN - INRIA - Polytechnique - X - CNRS : UMR - Ecole Centrale de Lille)
Cédric Join (INRIA Saclay - Ile de France - ALIEN - INRIA - Polytechnique - X - CNRS : UMR - Ecole Centrale de Lille, CRAN - Centre de recherche en automatique de Nancy - CNRS : UMR7039 - Université Henri Poincaré - Nancy I - Institut National Polytechnique de Lorraine - INPL)
Abstract

We derive two new technical indicators for trading systems and risk management. They stem from trends in time series, the existence of which has been recently mathematically demonstrated by the same authors (A mathematical proof of the existence of trends in financial time series, Proc. Int. Conf. Systems Theory: Modelling, Analysis and Control, Fes, 2009), and from higher order quantities which replace the familiar statistical tools. Recent fast estimation techniques of algebraic flavor are utilized. The first indicator tells us if the future price will be above or below the forecasted trendline. The second one predicts abrupt changes. Several promising numerical experiments are detailed and commented.

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Paper provided by HAL in its series Post-Print with number inria-00370168_v3.

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Date of creation: 2009
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Publication status: Published - Presented, 15th IFAC Symposium on System Identification (SYSID 2009), 2009, Saint-Malo, France
Handle: RePEc:hal:journl:inria-00370168_v3

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Related research
Keywords: Quantitative Finance; technical analysis; trading systems; risk management; trends; technical indicators; time series;

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  1. Michel Fliess & Cédric Join, 2009. "Systematic risk analysis: first steps towards a new definition of beta," Post-Print inria-00425077_v1, HAL. [Downloadable!]
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This page was last updated on 2009-12-16.


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