A comprehensive history of the evolution of technical analysis from ancient times to the Internet age Whether driven by mass psychology, fear or greed of investors, the forces of supply and demand, or a combination, technical analysis has flourished for thousands of years on the outskirts of the financial establishment. In The Evolution of Technical Analysis: Financial Prediction from Babylonian Tablets to Bloomberg Terminals, MIT's Andrew W. Lo details how the charting of past stock prices for the purpose of identifying trends, patterns, strength, and cycles within market data has allowed traders to make informed investment decisions based in logic, rather than on luck. The book
- Reveals the origins of technical analysis
- Compares and contrasts the Eastern practices of China and Japan to Western methods
- Details the contributions of pioneers such as Charles Dow, Munehisa Homma, Humphrey B. Neill, and William D. Gann
The Evolution of Technical Analysis explores the fascinating history of technical analysis, tracing where technical analysts failed, how they succeeded, and what it all means for today's traders and investors.
Table of Contents:
Introduction vii
Chapter 1: Ancient Roots 1
The Beginnings 2
Ancient Babylon 5
Ancient Greece 11
Ancient Rome 15
Negative Attitudes toward Traders 18
Chapter 2: The Middle Ages and the Renaissance 21
Western Europe 22
Technical Analysis 32
Societal Attitudes 39
Chapter 3: Asia 43
Japan 44
China 49
Chapter 4: The New World 59
Wall Street 60
Societal Attitudes 73
Chapter 5: A New Age for Technical Analysis 81
Dow Theory 82
Relative Strength 91
Market Cycles and Waves 92
Chart Patterns 94
Volume of Trading 96
Market Breadth 99
Nontechnical Analysis 99
Chapter 6: Technical Analysis Today 105
Trends 106
Patterns 109
Strength 111
Cycles 112
Wall Street’s Reinterpretation of Technical Analysis 114
Chapter 7: A Brief History of Randomness and Efficient Markets 131
Prices As Objects of Study 134
The Emergence of Efficient Markets 137
What is Random? 141
Chapter 8: Academic Approaches to Technical Analysis 149
Theoretical Underpinnings 150
Empirical Evaluation 151
Adaptive Markets and Technical Analysis 161
Notes 167
Bibliography 191
Acknowledgments 199
About the Authors 203
Index 205
