Technical Analysis and Freight Trading Strategies
Technical analysis is a relatively modern technique in detecting and projecting trends and patterns in the time series of asset prices and is used extensively for establishing trading strategies in commodity, stock and foreign exchange markets. Until recently, technical analysis was not widely used in the shipping industry. However, since the expansion of the freight derivatives market and an increase in freight trading liquidity as well as market depth, some traders have started to use technical analysis to investigate and exploit trading opportunities in the FFA market. The aim of this chapter is to present and discuss a number of technical analysis methods and trading rules applied to shipping freight and FFA markets as well as to the market for ships. In addition, we provide examples of how technical trading rules can be applied to the physical market in the form of establishing chartering strategies or even to the timing of investment in the market for ships.
KeywordsMoving Average Trading Strategy Sharpe Ratio Trading Rule Efficient Market Hypothesis
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