Technical forecasting

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Technical forecasting

A forecasting method that uses historical prices and trends.

Technical Forecasting

The practice of using statistics to determine future trends in security prices and make or recommend investment decisions based on those expected trends. Technical forecasting does not attempt to determine the intrinsic value of securities, but instead focuses on matters such as trade volume, demand, and volatility. Technical forecasters evaluate short-term trends almost exclusively, which is both a strength and a weakness in their analysis. See also: Fundamental Analysis.
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We find that excluding the first trading day following initiation of a technical buy or sell signal (which should provide a complete correction for the effects of nonsynchronous trading for the heavily traded Dow securities) reduces but does not eliminate the evidence of technical forecast power.
Interestingly, the technical forecast, which we constructed using a simple time-series model, also performs well.

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