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Are random trading strategies more successful than technical ones?


  • A. E. Biondo
  • A. Pluchino
  • A. Rapisarda
  • D. Helbing


In this paper we explore the specific role of randomness in financial markets, inspired by the beneficial role of noise in many physical systems and in previous applications to complex socio- economic systems. After a short introduction, we study the performance of some of the most used trading strategies in predicting the dynamics of financial markets for different international stock exchange indexes, with the goal of comparing them with the performance of a completely random strategy. In this respect, historical data for FTSE-UK, FTSE-MIB, DAX, and S&P500 indexes are taken into account for a period of about 15-20 years (since their creation until today).

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  • A. E. Biondo & A. Pluchino & A. Rapisarda & D. Helbing, 2013. "Are random trading strategies more successful than technical ones?," Papers 1303.4351,, revised Jul 2013.
  • Handle: RePEc:arx:papers:1303.4351

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    References listed on IDEAS

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    Cited by:

    1. Tanimoto, Jun & Sagara, Hirokji, 2015. "How the indirect reciprocity with co-evolving norm and strategy for 2 × 2 prisoner’s dilemma game works for emerging cooperation," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 438(C), pages 595-602.
    2. Aleksejus Kononovicius & Vygintas Gontis, 2014. "Herding interactions as an opportunity to prevent extreme events in financial markets," Papers 1409.8024,, revised May 2015.
    3. F. M. Stefan & A. P. F. Atman, 2017. "Asymmetric return rates and wealth distribution influenced by the introduction of technical analysis into a behavioral agent based model," Papers 1711.08282,
    4. Biondo, Alessio Emanuele, 2017. "Learning to forecast, risk aversion, and microstructural aspects of financial stability," Economics Discussion Papers 2017-104, Kiel Institute for the World Economy (IfW).
    5. David Garcia & Frank Schweitzer, 2015. "Social signals and algorithmic trading of Bitcoin," Papers 1506.01513,, revised Sep 2015.

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