The results are fairly obvious to anyone who has read "A Random Walk Down Wall Street".
Day traders rely on technical analysis which is the equivalent of astrology in the financial sector.
Day traders rely on technical analysis which is the equivalent of astrology in the financial sector.
This is a statistical reality, you can literally crunch the numbers! Behavioral finance has nothing to do with it.
I've always hated the argument of this book: yes the markets are chaotic and short term movements appear random, but the appearance of being random is not equivalent to being caused by a random process. The book makes a big deal about how technical analysts saw patterns in random data so it must be bunk, but this doesn't really say anything about the predictive power of technical analysis when the data is generated by the aggregate actions of thousands of traders instead of a coin toss.
Price action is not the result of investors literally buying or selling at random. Each action is undertaken in response to external conditions and it is far from absurd to believe that patterns can exist in the price.