ABSTRACT
As discussed in Chapter 2, most studies of technical analysis focus on speculation in one asset at a time. For the spot exchange market, none of the past studies has analyzed the case of simultaneous speculation in several currencies as part of a unified strategy, though some have formed equally weighted portfolios of single-currency speculations. The basic intuition of portfolio theory suggests the wisdom of speculating in many currencies at the same time. In Chapters 5 through 8 we analyze speculations using four different approaches to forming portfolios. In this chapter is much of the groundwork for the investigations in these later chapters. In particular, we discuss the trading rules investigated in coming chapters and how we select the parameters, such as the filter size in the Alexander rule, used in the speculations.
