Technical indicators under pressure
Performance and limitations in the face of market shocks
DOI:
https://doi.org/10.23882/emss25207Palavras-chave:
volatility, technicial indicators, financial markets, geopolitical crisisesResumo
This article examines the impact of geopolitical events on the reliability of technical indicators used in trend-following strategies. Using a database composed of daily series of several financial assets covering the period from January 2019 to November 2020, the study compares the behavior of indicators such as MMS_50, MME_20, RSI_14, MACD, and Stochastic %K between stable market conditions and periods of crisis, particularly those related to the Covid-19 pandemic. The analysis, performed in Python, reveals a marked deterioration in signal quality during periods of crisis: moving averages become less responsive, MACD loses consistency, and oscillators such as RSI are overused, which can generate false signals. Internal correlations between indicators are also altered, suggesting a break in the usual technical dynamics. A simple regression confirms the significant effect of preference on the trend, as measured by the MMS_50.
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Direitos de Autor (c) 2025 Rania LOUBARIS
Este trabalho encontra-se publicado com a Creative Commons Atribuição-NãoComercial 4.0.
