Technical Analysis Gives You Courage, But Not Money - on the Relationship between Technical Analysis Usage, Overconfidence and Investment Performance

• Autorzy: Elżbieta Kubińska , Marcin Czupryna , Łukasz Markiewicz , Jan Czekaj
• Języki publikacji: EN

Abstrakty

EN

This paper investigates the psychological background of the use of technical analysis in the financial markets. Such a background may give additional explanations to the popularity and common usage of technical analysis as an investment decision tool. This popularity is puzzling due to the missing theoretical and scientific background of technical analysis and the contradictory empirical evidence on its effectiveness. We postulate that overconfidence (regardless of its manifestation: calibration, better than average, and illusion of control) reinforces technical analysis usage. This hypothesis is tested in the present study conducted with professionals (traders in a proprietary trading company) and novices (finance students). The hypothesis received partial empirical support. Overconfidence - in particular the illusion of control - explains technical analysis usage in both investigated groups.(original abstract)

Słowa kluczowe

EN

Technical analysis; Investment; Psychology; Financial markets

PL

Analiza techniczna; Inwestycje; Psychologia; Rynki finansowe

• Czasopismo: Argumenta Oeconomica
• Rocznik: 2018
• Numer: nr 1 (40)
• Strony: 317--343

Twórcy

autor

Elżbieta Kubińska

• Cracow University of Economics, Poland

autor

Marcin Czupryna

• Cracow University of Economics, Poland

autor

Łukasz Markiewicz

• Kozminski University, Poland

autor

Jan Czekaj

• Uniwersytet Ekonomiczny w Krakowie

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Identyfikatory

DOI

10.15611/aoe.2018.1.14