Effects of trend strength and direction on performance and consistency in judgmental exchange rate forecasting

Mary Thomson, Andrew C. Pollock, M. Sinan Gönül, Dilek Önkal

Research output: Contribution to journalArticle

Abstract

Using real financial data, this study examines the influence of trend direction and strength on judgmental exchange rate forecasting performance and consistency. Participants generated forecasts for each of 20 series. Half of the participants also answered two additional questions regarding their perceptions about the strength and direction of the trend present in each of the series under consideration. The performance on ascending trends was found to be superior to that on descending trends, and the performance on intermediate trends was found to be superior to that on strong trends.
Original languageEnglish
Pages (from-to)337–353
Number of pages17
JournalInternational Journal of Forecasting
Volume29
Issue number2
DOIs
Publication statusPublished - Apr 2013

Keywords

  • exchange rate forecasting
  • decision-making

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