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The Evolution of Technical Analysis
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
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.
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.
224 pages, Hardcover
First published August 26, 2010
About the author
Andrew W. Lo
44 books83 followersAndrew Wen-Chuan Lo is the Charles E. and Susan T. Harris Professor of Finance at the MIT Sloan School of Management. Lo is the author of many academic articles in finance and financial economics
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Displaying 1 - 8 of 8 reviews
December 19, 2021
It is quite fascinating to see how technical analysis evolved (and stayed the same) over centuries. It seems like there is just something very innate human about trying to find patterns in things and then aiming to exploit that for financial gains. The authors go back to the Babylonians, Greeks, and Romans. However, they also cover more recent things like the invention of the stock ticker, telegraph, computer, and how those things impacted technical analysis. Overall, an interested, but not enlighting read. I liked it, but didn´t love it or would recommend it to anybody who isn´t already looking for something to read on that topic.
February 9, 2019
A good overview of the history of technical analysis from Babylonia to right before the contemporary machine learning era in finance. The author does a good job of showing how technical analysis arose from a "scientific mindset" albeit one that was unveiled in mysticism and astrology, when ancient traders and money changers augmented observation of harvest, politics, and flows of goods with star-gazing to serve as predictive indicators to phenomena in the forthcoming seasons.
The author shows that these early technicians even attempted to validate their predictions with outcomes they recorded, in a procedure similar to modern statistical learning. Other interesting facts include the practice of traders to increase the frequency of observations by increasing the number of columns for each period, a transposition of what we do by increasing rows, though the same effect, of trying to discern smaller movements in price, essentially decreasing the time delta.
The book moves through medieval Europe and Japan next and goes through some Japanese thinking on commodity trading that anticipate the Dow Theory 100 years prior to that work. This was the only book I've read in mass-market publications that do a good description of Dows theory and helps explain the origins of a lot of terms commonly used by technicians, including contrary movements, head-shoulders patterns, momentum, volume etc.
Overall a great intro, would probably need a more detailed treatment on all topics to be functional, but enough to get one started. Recommend
The author shows that these early technicians even attempted to validate their predictions with outcomes they recorded, in a procedure similar to modern statistical learning. Other interesting facts include the practice of traders to increase the frequency of observations by increasing the number of columns for each period, a transposition of what we do by increasing rows, though the same effect, of trying to discern smaller movements in price, essentially decreasing the time delta.
The book moves through medieval Europe and Japan next and goes through some Japanese thinking on commodity trading that anticipate the Dow Theory 100 years prior to that work. This was the only book I've read in mass-market publications that do a good description of Dows theory and helps explain the origins of a lot of terms commonly used by technicians, including contrary movements, head-shoulders patterns, momentum, volume etc.
Overall a great intro, would probably need a more detailed treatment on all topics to be functional, but enough to get one started. Recommend
January 3, 2021
I'm a sucker for these deep-in-the-weeds technical origin stories
June 4, 2021
Great overview of technical analysis history, with a bunch of references and tips.
April 27, 2022
Nothing special
August 4, 2023
I want to read this book
July 24, 2012
The first half of the book says that technical analysis is an ancient, low prestige, profitable occupation. The second half of the book goes into the modern evolution of technical analysis, and that it is hardly more respectable now than it was then than. The authors point out that there are flaws in the dominant theory, which is the Efficient Market Hypothesis, and therefore technical analysis has value.
According to the book, for thousands of years, Technical Analysis has not been respected, and it is still that way.
According to the book, for thousands of years, Technical Analysis has not been respected, and it is still that way.
Displaying 1 - 8 of 8 reviews