Using digital techniques and time-price angles to build a predictive technical approach in the currency exchange market
(An applied study on the exchange rate of the US dollar against the British pound for the period 2016-2024)
A thesis submitted to the Council of the College of
Administration and Economics, University of Karbala, as part of the requirements for a PhD in Banking and Financial Sciences.
By
Muhannad Rashid Sharqi Al-Majidi
Supervised by:
Assistant Professor Hashim Jabbar Al-Hussaini
Assistant Professor Haider Abbas Al-Janabi
Abstract
The main objective of the study is to present the theoretical foundations for numerical and time-based analysis in the foreign exchange (FX) market, as well as the trading mechanisms and procedures used therein. It then highlights some of the methods used by traders to predict the direction of foreign exchange rates.
After reviewing the theoretical features of the foreign exchange market, the researcher attempted to identify the types of price and time angles that can be used to predict foreign exchange rates in practice. By applying price angles to the US dollar/GBP exchange rate between 2016 and 2024, and analyzing them mathematically and time-based, he also attempted to verify the effectiveness of these models in predicting currency prices. The results of the study demonstrated a better understanding of how price angles affect price movement, the extent to which they can be used to improve forecasting and pricing in the market numerically and over time, and how to create a predictive technical framework or model that facilitates the use of price angles. The study concluded with recommendations, the most important of which is that traders are advised to rely more heavily on timeframe price angles in stable markets or when trading on longer time frames, as the angles have shown accurate predictions in these cases. They can also be used to identify long-term trends and anticipate major reversals. Timeframe price angles should be combined with other technical analysis tools such as moving averages and the Relative Strength Index (RSI) to provide more robust and accurate signals. Combining timeframes with other technical tools contributes to more reliable trading signals. A hybrid analysis approach is also recommended, where price angles are combined with technical analysis indicators. This will enable more accurate predictions based on multiple analytical methods. Case studies are recommended over shorter time frames to test the impact of timeframe price angles in predicting rapid price movements and to provide guidance for traders relying on day trading strategies.
