Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/60582
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dc.contributor.authorOsler, C. L.en_US
dc.date.accessioned2012-08-17T14:25:49Z-
dc.date.available2012-08-17T14:25:49Z-
dc.date.issued2001en_US
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_US
dc.language.isoengen_US
dc.publisher|aFederal Reserve Bank of New York |cNew York, NYen_US
dc.relation.ispartofseries|aStaff Report, Federal Reserve Bank of New York |x125en_US
dc.subject.jelG1en_US
dc.subject.jelF3en_US
dc.subject.ddc330en_US
dc.subject.keywordMicrostructureen_US
dc.subject.keywordExchange Ratesen_US
dc.subject.keywordOrdersen_US
dc.subject.keywordTechnical Analysisen_US
dc.subject.keywordHigh-frequencyen_US
dc.subject.stwDevisenhandelen_US
dc.subject.stwWertpapieranalyseen_US
dc.subject.stwMikrostrukturanalyseen_US
dc.subject.stwWechselkursen_US
dc.subject.stwTheorieen_US
dc.titleCurrency orders and exchange-rate dynamics: Explaining the success of technical analysisen_US
dc.typeWorking Paperen_US
dc.identifier.ppn331762730en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US

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