One of the things every experienced analyst and executive knows is that a good ‘killer chart’ can tell the story we want investors to hear and make them understand that story.
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...
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?
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...