3803719: Behavioral finance and technical analysis

Description

Behavioral Finance (Schiereck)
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• Critique of the Expected Utility Theory
• Prospect Theory
• Kinds and Consequences of Heuristic Distortion
• Framing

• Philosophy of technical analysis / Dow Theory
• Types of charts
• Classical chart formations (Theory and practical examples)
• Oscillators (including Price, volume and open interest)

• Fibonacci / Elliott Waves
• Ichimoku Charting
• DeMark Indicators

• Socionomics
• News trading

Learning Outcomes

• Critically scrutinising decision theory fundamentals in finance
• Considering psychological aspects in investment decisions
• Explaining momentum und rebound strategies
• Defining technical indicators
• Evaluating and applying technical analysis instruments
• Understanding the connection between alternative techniques: fundamental, technical and sentiment

Lectures Method

Interactive lecture with exercises

Literature

Required reading:

• Brown, L.D. (1993). Earnings Forecasting Research: its implications for Capital Markets Research. International Journal of Forecasting, Vol 9, pp. 295-320.
• De Bondt, W.F. M. /Thaler, R.H. (1990). Do Security Analysts Overreact? American Economic Review, American Economic Association, Vol 80 (2), pp. 52-57.
• De Bondt, W.F.M. /Forbes, W.H. (1999). Herding in Analysts Earnings Forecasts. In: European Financial Management, Vol. 5, pp. 143-163.
• Kahnemann, D. /Tverky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. In Econometrica. Vol. 47. No. 2. pp. 263-292.
• Odean, T. (1998). Are Investors Reluctant to Realize Their Losses? Journal of Finance. American Finance Association. Vol. 53 (5). pp. 1775-1798.

• Murphy, J. (1999). Technical Analysis of the Financial Markets. New York Institute of Finance

Materials

Lecture slides, exercises, sample questions will be available on Moodle