Summary of The Evolution of Technical Analysis

Looking for the book?
We have the summary! Get the key insights in just 10 minutes.

The Evolution of Technical Analysis book summary
Start getting smarter:
or see our plans

Rating

7

Qualities

  • Overview

Recommendation

Finance professor Andrew W. Lo and research specialist Jasmina Hasanhodzic present a history of finance and of the development of business and stock markets. Their informative research connects the commerce of ancient times to modern practices, theories and analytical methods. getAbstract recommends this sweeping and engaging history to professionals curious about how business evolved and to students majoring in economics, finance, history or related disciplines.

About the Authors

Andrew W. Lo is a professor of finance at the MIT Sloan School of Management and the chairman of the AlphaSimplex Group, where electrical engineer and computer scientist Jasmina Hasanhodzic is a researcher.

 

Summary

How Technical Analysis Works

Technical analysis seeks patterns like cycles or waves in past market data to forecast prices. This kind of study originated long before computers permitted the development of today’s math-intensive, analytical theories. Technical analysis and quantitative analysis both attempt to predict the future based on the past, but quantitative analysis depends on a rigorously mathematical approach, while technical analysis applies human judgment and interpretation to data. “One is statistical, the other is intuitive.” The investment industry more commonly uses quantitative analysis, while technical analysis prevails in commodities and currency trading.

Ancient Arithmetic

Ancient civilizations left many examples of their technical analyses, including “Babylonian price records, Greek market sentiment assessments and Roman seasonality patterns.” These early societies followed market prices and sought to gauge how supply and demand shifts would affect prices and profits. They also applied insights gleaned from astrology and weather observations.

Early Babylonian commercial innovations included using a system of weights and measures...


More on this topic

By the same authors

Adaptive Markets
8

Customers who read this summary also read

Investment
7
Cryptoassets
8
Too Smart for Our Own Good
8
The Aisles Have Eyes
9
Sea Power
8
Narrative and Numbers
8

Related Channels

Comment on this summary