Journal of Computations & Modelling
A General Methodology for Testing the Performance of Technical Analysis on Financial Markets
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Our study provides a general methodology for testing the performance of technical analysis on any market. This methodology is very useful to evaluate whether or not a market is efficient (EMH) in its weak form. The main difficulties of this area of research are encountered when one wants to provide a general result on different tools of technical analysis taken separately or as a trading system. Performance of trading systems is complicated to evaluate. They need to be programmed in the same exact way, with a general methodology. Its objective is to be able to compare the results and estimate if they issued a significant performance which can cause a bias in efficient market hypothesis.