Quantitative Finance
88 Citations•2023•
S. Maier-Paape
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Abstract
In this paper, we show how market-technical trends can be calculated automatically from underlying priceprocessesusingastopandreverseprocess.Thebasictoolisasocalledminmaxprocessindicating allrelevantminimaandmaxima.Fortheexistenceoftheminmaxprocess,wegiveaconstructiveproof.Severalsuccessfultrend-followingtradingstrategiescanbeimplementedautomaticallybased onthis1-2-3-trendindicator.