The Combined Signal Approach to Technical Analysis: A Review & Commentary

Abstract

The Combined Signal Approach (CSA) to technical analysis combines individual trading rules into a consensus signal that is more profitable than the individual signals alone. It could be that the CSA performs better than individual signals because information related to future price moves is dispersed among various trading rules. In addition, the CSA mitigates the problem of choosing between individual trading rules when they provide conflicting signals. This paper reviews the extant body of literature on the CSA. The purpose of this paper is to increase awareness of, and foster additional research on, the CSA model.

Keywords: Technical Analysis, Combined Signal Approach, Trading Models, Market Efficiency

JEL Classification: C15, G11, G14