Technical Analysis in the United Kingdom

Martin Sewell (martin@msewell.force9.co.uk)
Tue, 30 Mar 1999 21:33:35 +0200 (MET DST)

Dear All

I am working as an independent researcher on behalf of the Society of
Technical Analysts in the United Kingdom. The STA is a non-profit
organization. We want to discover who is doing what in UK academia
vis--vis Technical Analysis and related disciplines in financial or
commodity markets.

Although we are only interested in Technical Analysis being applied to
financial and commodity markets, we also wish to include more recent
techniques involving neural networks, genetic algorithms, fuzzy logic,
nonlinear dynamics, chaos theory, game theory, market psychology, etc.
If you require a fuller definition, I've listed the things that a
technical analyst is likely to believe at the end of this message.

We're equally interested in those who have done any work that refutes
Technical Analysis.

For information about the STA in general, see:
http://www.sta-uk.org/

International Federation of Technical Analysts (IFTA) Web site:
http://www.ifta.org/

The STA as part of IFTA (The International Federation of Technical
Analysts) is trying to put together a global list of academics who are
all working in related fields. Some of these people may call themselves
economists, statisticians or quants; some of them will operate under the
guise of 'behavioural scientists'.

The bottom line as far as we are concerned is that if they are studying
marketplaces or prices and are using price history or price patterns as
inputs, then they are likely to be suitable candidates. They will be
interested in price, time and volume. Some of these people we expect to
be critical of Technical Analysis, this is not meant to be a list of
supporters, only players.

If you feel that you've done any work in this area, I would be most
grateful if you could e-mail me some details. Ultimately we may want to
be able to make contact in the future.

I'd be most grateful if you could also forward this message to any UK
academics you may know who have done some work in the area of Technical
Analysis.

Thanking you in advance for any help.

Regards

Martin Sewell
Society of Technical Analysts

e-mail: martin@msewell.force9.co.uk
___________________________________________

In order to define technical analysis (which incorporates charting) more
clearly, I've listed below the things that technical analysts (or
chartists) are likely to believe:

They believe that the balance of supply and demand, or market action, is
the root of price setting.
They believe that "The Averages Discount Everything". In other words
that all hopes, fears and knowledge, including reasonable expectation,
is discounted or incorporated in the current price.
As they believe that price is all that matters - they record and keep
track of it.
The best way to forecast future price movements is to analyze the
patterns that can be seen in past movements.
History repeats itself.
They are more interested in the fact that a price breaks its historical
support level than the reason for it.
They look for unusual volumes of trading and breakouts, rather than the
fundamental factors behind the market.
They say that a price reflects the consensus of everyone in the market.
They look at movement of the herd, and believe in its statistical
regularity.
They are only concerned with price, time and volume.
They refute all three forms of the Efficient Markets Hypothesis (EMH).
It is the alternative to fundamental analysis.

--
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