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will's avatar

Is this fact or fiction:

When asked if a chart is bullish or bearish most technicians will unconsciously favor the last candle regardless of preceding patterns?

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Joachim Klement's avatar

I don't know a study that shows this, but it sounds very much correct. There is something called the recency bias in analysis and one can show that any kind of analysis (fundamental or technical) is swayed by the most recent data points. It gets even weirder. I am thinking about writing a new study that showed that even machine learning systems and AI shows recency bias and overreaction to the most recent news...

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