Abstract

ZULUAGA, MAURICIO  and  VELASQUEZ, JUAN D.. TECHNICAL INDICATOR SELECTION FOR NEGOTIATING IN THE COLOMBIAN FOREIGN EXCHANGE MARTKET I: SINGLE BEHAVIOURS. Dyna rev.fac.nac.minas [online]. 2007, vol.74, n.152, pp.9-20. ISSN 0012-7353.

The main objective of this work is determining the applicability of technical indicators for negotiating in the Colombian Foreign Exchange Market. For this purpose, a group of indicators was individually tested in the generation of buy and sale signals, and their quality was tested using a simple model of investment for the period after the establishment of the present exchange regime.  With the intention of approximating the study to the real conditions of the market, any analyses including transaction costs and an investment in risk-free assets to determine their effects, were also made.  It is found that it is possible to obtain returns when the investment is made in dollars, obeying the signals originated from some indicators (like the Demand Index, the price Oscillator or the Momentum), but conditioned to the fact that low costs of transaction can be obtained, as well as rates of quotations very similar to the TRM; it is possible to make long term investments, supporting some periods of losses, too.

Keywords : Technical Indicators; Technical Analysis; Colombian Exchange Market; TRM; oscillators; trend; trading.

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