Whereas the investment theories in Chapter 3 assume that
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Whereas the investment theories in Chapter 3 assume that the log returns are i.i.d., technical trading rules are based o
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Whereas the investment theories in Chapter 3 assume that the log returns are i.i.d., technical trading rules are based on the implicit assumption that the returns have certain detectable patterns which can reveal profitable trading strategies. Sections II.A, B and III of Lo, Mamaysky, and Wang (2000, abbreviated by LMW) describe five
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