Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/60582 
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dc.contributor.authorOsler, C. L.en
dc.date.accessioned2012-08-17T14:25:49Z-
dc.date.available2012-08-17T14:25:49Z-
dc.date.issued2001-
dc.identifier.urihttp://hdl.handle.net/10419/60582-
dc.description.abstractThis paper provides a microstructural explanation for the success of two familiar predictions from technical analysis: 1) trends tend to be reversed at predictable support and resistance levels, and 2) trends gain momentum once predictable support and resistance levels are crossed. ; The explanation is based on a close examination of stop-loss and take-profit orders at a large foreign exchange dealing bank. Take-profit orders tend to reflect price trends, and stop-loss orders tend to intensify trends. The requested execution rates of these orders are strongly clustered at round numbers, which are often used as support and resistance levels. Significantly, there are marked differences between the clustering patterns of stop-loss and take-profit orders, and between the patterns of stop-loss buy and stop-loss sell orders. These differences explain the success of the two predictions.en
dc.language.isoengen
dc.publisher|aFederal Reserve Bank of New York |cNew York, NYen
dc.relation.ispartofseries|aStaff Report |x125en
dc.subject.jelG1en
dc.subject.jelF3en
dc.subject.ddc330en
dc.subject.keywordMicrostructureen
dc.subject.keywordExchange Ratesen
dc.subject.keywordOrdersen
dc.subject.keywordTechnical Analysisen
dc.subject.keywordHigh-frequencyen
dc.subject.stwDevisenhandelen
dc.subject.stwWertpapieranalyseen
dc.subject.stwMikrostrukturanalyseen
dc.subject.stwWechselkursen
dc.subject.stwTheorieen
dc.titleCurrency orders and exchange-rate dynamics: Explaining the success of technical analysis-
dc.typeWorking Paperen
dc.identifier.ppn331762730en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

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