Technische Analyse durch Computertest bestätigt — Random Walk Theorie widerlegt

Abstract

Technical Analysis Confirmed by Computer Test Random Walk Theory Refuted

Hockmann has set up an experiment to test technical analysis. He tests point & figure analysis. He proceeds in the following manner: he buys a share as soon as there is a buy signal, he holds it until there is a sell signal, from then on he holds cash until there is a buy signal again. The test is conducted by a computer. Therefore it is free of any subjective movements. The test is conducted with extreme methodical precision. The result is that a strategy according to the rules of point & figure analysis yields more profit than a buy & hold strategy. The general refusal of technical analysis in the scientific literature up to now can be attributed to false and misleading tests. In the literature on the random walk theory the hypothesis has been extensively tested whether changes in share prices of a certain period depend on changes in share prices of the previous period. The results were negative for periods of more than two days. But this does not test technical analysis, since technical analysis does not postulate such a dependence. Levy’s? test too is in truth no test of technical analysis. Levy’s “formations” are not identical with those of technical analysis. Furthermore Levy calculates the results of the investment always for a certain period after there has been a buy or sell signal. This procedure does not conform to technical analysis, since technical analysis does not recommend holding or not holding a share for a certain period but from signal to signal.