The use of fundamental and technical analyses(国际金融-香港大学,WONG Ka Fu).ppt

The use of fundamental and technical analyses by foreign exchange dealers in Hong Kong WONG Ka Fu 8th February 2000 Lui and Mole (1998) reported the results of a questionnaire survey conducted in February 1995 They investigated the use made by foreign exchange dealers of fundamental and technical analyses to form their forecasts of exchange rate movements in the Hong Kong foreign exchange market 812 questionnaires were sent to Hong Kong Forex Association members. 153 fully completed questionnaires were returned, a response rate of 19%. Perceived usefulness of fundamental analysis and technical analysis in predicting trends and turning points Interpretation Dealers perceive value in using both fundamental and technical analysis predict both trends and turning points. In forecasting trends, technical analysis is considered only slightly more useful than fundamental analysis, but in predicting turning points technical analysis is considered significantly more useful than the latter. Perceived importance of fundamental and technical analyses over different forecast horizons Interpretation At all time horizons, a very high proportion of respondents place some weight on both fundamental and technical analyses when forming views. At shorter horizons, there exists a skew towards reliance on technical as opposed to fundamental analysis, but the skew becomes steadily reversed as the length of horizon considered is increased. Interpretation Models that focus on fundamentals may perform poorly over short horizons because they miss the impart of technical analysis-based decision on the market. Over a longer horizon, models based on fundamental economic reasoning may perform better. Perceived Complementarity of Fundamental and Technical Analyses (percentage of respondents) Interpretation Dealers perceive complementarity in using both fundamental and technical analysis predict both trends and turning points. Perceived importance of fundamental factors Interpretation Interes