In this article, the author explores the use of technical analysis in guiding investment decisions. Many investors are skeptical of this approach, comparing it to astrology. However, the author argues that technical analysis, specifically the SMA crossover strategy, can provide an edge for long-term investors. This strategy involves using moving averages to determine when to buy or sell an asset. The author backtests this strategy on the SPY ETF and finds that while it does not significantly outperform simply buying and holding, it does help investors avoid extended drawdowns. The article also briefly mentions financial astrology and tests a strategy based on lunar cycles, which proves to be ineffective. Ultimately, the author concludes that simple technical analysis strategies can minimize risk without necessarily reducing profits, but there are no guarantees for future success.
https://alicegg.tech//2023/07/25/technical-analysis.html