Research of technical analysis methods on the futures markets

Investigating historical price data to accurately predict the future is called Technical Analysis. According to Efficient Market Hypothesis, markets efficiently reflect all information in price formations. Weak Efficient Market Hypothesis states that all information in previous price data is continuously reflected in market prices. Weak Efficient Market Hypothesis tells us that examining past price data will not have a positive affect on our decisions concerning future prices. Thus, the use of Technical Analysis methods will not have a favorable effect. Our study aims to test the validity of Technical Analysis methods on the Turkish futures market. Futures contracts concerning Istanbul Stock Exchanges Index of 30 Companies, USD/TL, EURO/TL and Gold which are traded on the Futures and Options Exchange were examined. In order to test Technical Analysis methods, contracts with different maturities were combined together to create price data continuity. Different methods of Technical Analysis that are most widely used today were tested on generated data. The data was then used to create T-Test result in order to perfom statistical analysis. Although, mankind investigates past price data to find information concerning the future, the validity of Weak Form Efficient Market Hypothesis still stands.