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

D 2018

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

SVOBODA, Miroslav, Tomáš PLÍHAL and Pavel SEDLÁČEK

Basic information

Original name

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

Authors

SVOBODA, Miroslav (203 Czech Republic, guarantor, belonging to the institution), Tomáš PLÍHAL (203 Czech Republic, belonging to the institution) and Pavel SEDLÁČEK (203 Czech Republic, belonging to the institution)

Edition

1. vyd. Brno, Proceedings of the 15th International Scientific Conference European Financial Systems 2018, p. 743-748, 6 pp. 2018

Publisher

Masaryk University

Other information

Language

English

Type of outcome

Stať ve sborníku

Field of Study

50206 Finance

Country of publisher

Czech Republic

Confidentiality degree

není předmětem státního či obchodního tajemství

Publication form

printed version "print"

RIV identification code

RIV/00216224:14560/18:00103815

Organization unit

Faculty of Economics and Administration

ISBN

978-80-210-8980-8

UT WoS

000462948800094

Keywords in English

Technical Analysis; Investment Decisions; Foreign Exchange Markets; Currency Markets; Random Strategy; Backtesting

Abstract

V originále

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.

Links

MUNI/A/1092/2017, interní kód MU

Name: Finanční stabilita a ekonomický vývoj (Acronym: FIN2018)

Investor: Masaryk University, Category A

Citovat

SVOBODA, Miroslav, Tomáš PLÍHAL and Pavel SEDLÁČEK. Random Strategy Versus Technical Analysis Strategy: The Case of GBP/USD Intraday Trading. In Josef Nešleha, Filip Hampl, Miroslav Svoboda. Proceedings of the 15th International Scientific Conference European Financial Systems 2018. 1st ed. Brno: Masaryk University, 2018, p. 743-748. ISBN 978-80-210-8980-8.

@inproceedings{1442045,
   author = {Svoboda, Miroslav and Plíhal, Tomáš and Sedláček, Pavel},
   address = {Brno},
   booktitle = {Proceedings of the 15th International Scientific Conference European Financial Systems 2018},
   edition = {1.},
   editor = {Josef Nešleha, Filip Hampl, Miroslav Svoboda},
   keywords = {Technical Analysis; Investment Decisions; Foreign Exchange Markets; Currency Markets; Random Strategy; Backtesting},
   howpublished = {tištěná verze "print"},
   language = {eng},
   location = {Brno},
   isbn = {978-80-210-8980-8},
   pages = {743-748},
   publisher = {Masaryk University},
   title = {Random Strategy Versus Technical Analysis Strategy: The Case of GBP/USD Intraday Trading},
   year = {2018}
}

TY  - JOUR
ID  - 1442045
AU  - Svoboda, Miroslav - Plíhal, Tomáš - Sedláček, Pavel
PY  - 2018
TI  - Random Strategy Versus Technical Analysis Strategy: The Case of GBP/USD Intraday Trading
PB  - Masaryk University
CY  - Brno
SN  - 9788021089808
KW  - Technical Analysis
KW  - Investment Decisions
KW  - Foreign Exchange Markets
KW  - Currency Markets
KW  - Random Strategy
KW  - Backtesting
N2  - 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.
ER  -

SVOBODA, Miroslav, Tomáš PLÍHAL and Pavel SEDLÁČEK. Random Strategy Versus Technical Analysis Strategy: The Case of GBP/USD Intraday Trading. In Josef Nešleha, Filip Hampl, Miroslav Svoboda. \textit{Proceedings of the 15th International Scientific Conference European Financial Systems 2018}. 1st ed. Brno: Masaryk University, 2018, p.~743-748. ISBN~978-80-210-8980-8.

Detailed Information on Publication Record