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Market timing with candlestick technical analysis

Author

Listed:
  • Marshall, Ben

    () (Massey University)

  • Young, Martin

    () (Massey University)

  • Rose, Lawrence

    () (Massey University)

Abstract

We investigate the profitability of the quantitative market timing technique of candlestick technical analysis in the U.S. equity market. Despite being used for centuries in Japan and now having a wide following amongst market practitioners globally, there is little research documenting its profitability or otherwise. We find that these strategies are not generally profitable when applied to large U.S. stocks. Basing trading decisions solely on these techniques does not seem sensible but we cannot rule out the possibility that they compliment some other market timing techniques.

Suggested Citation

  • Marshall, Ben & Young, Martin & Rose, Lawrence, 2007. "Market timing with candlestick technical analysis," Journal of Financial Transformation, Capco Institute, vol. 20, pages 18-25.
  • Handle: RePEc:ris:jofitr:0834
    as

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    More about this item

    Keywords

    Timing; Candlesticks; Technical Analysis; Quantitative Investment;

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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