Ergun LMolchanov AStork P2024-06-212024-06-212023-12Ergun L, Molchanov A, Stork P. (2023). Technical trading rules, loss avoidance, and the business cycle. Pacific Basin Finance Journal. 82.0927-538Xhttps://mro.massey.ac.nz/handle/10179/69966We show that simple technical trading rule (TTR) strategies substantially reduce investment left tail risk. An investor following a TTR strategy can also avoid a high percentage of extremely negative returns. This percentage increases substantially during recessions. Interestingly, tail risk reduction does not come at a cost of lower performance – risk adjusted returns of TTR strategies are in fact higher than those of a buy-and-hold strategy. Our findings are robust to changes in trading strategy specifications. They hold in 38 international equity markets, as well as in a large sample of individual US stocks, and survive a reality check bootstrap.(c) 2023 The Author/sCC BY 4.0https://creativecommons.org/licenses/by/4.0/Tail riskTechnical trading rulesLoss avoidanceJournal article10.1016/j.pacfin.2023.1021721879-0585journal-article102172S0927538X23002433