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Mastering R for Quantitative Finance by Edina Berlinger, Ferenc Illés, Milán Badics, Ádám Banai, Gergely Daróczi, Barbara Dömötör, Gergely Gabler, Dániel Havran, Péter Juhász, István Margitai, Balázs Márkus, Péter Medvegyev, Julia Molnár, Balázs Árpád Szűcs, Ágnes Tuza, Tamás Vadász, Kata Váradi, Ágnes Vidovics-Dancs

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Technical analysis

Technical analysis (TA) can help you achieve better results if you do not overestimate its predictive power. Technical analysis is especially good at predicting short-term trends and at indicating market sentiment. Fundamental investors (and one of the writers of this chapter) use them to choose their buy-in and sell-out point: given their fundamentally backed view on the direction of the market technical analysis is a valuable help in choosing the short-term optimum. It can also eliminate such common trading flaws as badly chosen position size (indication on the strength of the trend), shaky hands (only sell when there is a sign) and inability to press the button (but when there is a sign, do sell).

Three golden rules to remember ...

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