Skip to main content

Are technical trading rules profitable? Evidence for head-and-shoulder rules

Buy Article:

$53.17 plus tax (Refund Policy)


The profitability of chartist trading rules on foreign exchange markets is still under debate. Since simple technical trading rules may not adequately capture the complex phenomenon of chartist trading, this study focuses on the prominent head-and-shoulder pattern as a representative trading rule which incorporates various 'technical' ideas such as smoothed trends, trend reversal, resistance levels, and volatility clustering. For various combinations of the building blocks of head-and-shoulder definitions the result is generally negative: Returns to head-and-shoulder trading rules are not significantly positive - and if there is any evidence for non-zero returns at all, then it is evidence for negative returns.

Document Type: Research Article


Affiliations: Universität Hamburg, Institut für Wachstum and Konjunktur, Fachbereich Wirtschaftswissenschaften, Von-Melle-Park 5, D-20146 Hamburg E-mail:

Publication date: January 1, 2003

More about this publication?

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Partial Open Access Content
Partial Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more