Random Strategy Versus Technical Analysis Strategy: The Case of GBP/USD Intraday Trading

Kód výsledku v IS VaVaI

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Výsledek na webu

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DOI - Digital Object Identifier

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Jazyk výsledku

angličtina

Název v původním jazyce

Random Strategy Versus Technical Analysis Strategy: The Case of GBP/USD Intraday Trading

Popis výsledku v původním jazyce

Abstract: This paper provides a comparison between the strategy based on technical analysis and the strategy based on random trading on a highly liquid GBP/USD foreign exchange market. We analyze six months of data, and in every intraday trading session, only a single position will be opened. Technical analysis strategy uses essential indicator relative strength index (RSI). Every trading position will have the risk-reward ratio (RRR) 3 to 1. In addition, another trading positions on the GBP/USD currency pair will be opened at the same time each day, without technical analysis. The time of entry into position will be indicated by past high liquidity on a given currency pair at a given time with a similar risk-reward-ratio (RRR) 3 to 1. We want to answer the question whether it is preferable to use the technical analysis indicators or to open a trading position randomly in intraday trading. In other words, this article aims to compare the strategy of technical analysis and the random strategy in intraday trading concerning the profitability of these trades. On the basis of our preliminary results, we expect that the random strategy will show us higher profitability or lower loss ability than the strategies based on the technical analysis indicators in the observed period.

Název v anglickém jazyce

Random Strategy Versus Technical Analysis Strategy: The Case of GBP/USD Intraday Trading

Popis výsledku anglicky

Abstract: This paper provides a comparison between the strategy based on technical analysis and the strategy based on random trading on a highly liquid GBP/USD foreign exchange market. We analyze six months of data, and in every intraday trading session, only a single position will be opened. Technical analysis strategy uses essential indicator relative strength index (RSI). Every trading position will have the risk-reward ratio (RRR) 3 to 1. In addition, another trading positions on the GBP/USD currency pair will be opened at the same time each day, without technical analysis. The time of entry into position will be indicated by past high liquidity on a given currency pair at a given time with a similar risk-reward-ratio (RRR) 3 to 1. We want to answer the question whether it is preferable to use the technical analysis indicators or to open a trading position randomly in intraday trading. In other words, this article aims to compare the strategy of technical analysis and the random strategy in intraday trading concerning the profitability of these trades. On the basis of our preliminary results, we expect that the random strategy will show us higher profitability or lower loss ability than the strategies based on the technical analysis indicators in the observed period.

Druh

D - Stať ve sborníku

CEP obor

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OECD FORD obor

50206 - Finance

Projekt

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Návaznosti

S - Specificky vyzkum na vysokych skolach

Rok uplatnění

2018

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název statě ve sborníku

Proceedings of the 15th International Scientific Conference European Financial Systems 2018

ISBN

9788021089808

ISSN

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e-ISSN

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Počet stran výsledku

6

Strana od-do

743-748

Název nakladatele

Masaryk University

Místo vydání

Brno

Místo konání akce

Brno

Datum konání akce

1. 1. 2018

Typ akce podle státní příslušnosti

WRD - Celosvětová akce

Kód UT WoS článku

000462948800094