Curriculum·S203 Chart Literacy and Evidence·about 32 min
The honesty module
By the end of this lesson you can
- →State the four findings this course reported and why they do not collapse into a verdict
- →Explain the difference between accuracy and calibration, and why the lab scores the second
- →Record a read in a form that can be graded, before the outcome is known
- →Distinguish a chart used for prediction from a chart used for risk definition
Sophomore · enrolled learners
This lesson opens with The financial Turing test.
- What happened
- Hasanhodzic, Lo and Viola ran an experiment testing whether people can distinguish actual financial price series from randomly generated ones. Seventy-eight subjects took part in up to eight contests over two weeks, viewing charts and judging which were real. The result contradicted the common assumption on both sides of the argument: the study reported overwhelming statistical evidence, with p-values of at most 0.5 percent, that humans can quickly learn to distinguish actual price series from randomly generated ones. The finding does not establish that the distinguishing features are tradeable, or that the subjects could articulate what they were detecting.
- The decision point
- The comfortable positions are that charts contain readable structure and that charts are indistinguishable from noise, and this experiment is inconvenient for the second while establishing nothing for the first. Price series contain detectable non-randomness that a person can learn to perceive within days. Whether that detectable structure can be converted into a decision that survives costs is a separate question, and it is the question this whole course has been unable to answer with the published evidence.
What you will be able to answer
- →What is the difference between accuracy and calibration?
- →Why does the lab score calibration rather than accuracy?
- →What did the financial Turing test find?
- →What survives from this course regardless of predictive power?
Orientation and Year One are open: anyone can read them without an account. From Year Two onward the lessons are for enrolled learners, because progress through the later years only means anything if it is tracked against a record.
It is free. We do not sell the list and there is nothing to buy at the end of it.
Sources and review
- https://arxiv.org/pdf/1002.4592
- https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr42.pdf
- https://www.newyorkfed.org/research/staff_reports/sr42.html
- https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1467-6419.2007.00519.x
Confidence medium·Volatility low·Reviewed 2026-08-05·Owner unassigned
Contested
The financial Turing test establishes detectability, not tradeability, and the paper does not claim otherwise. Any revision that presents it as evidence that charting works has overread it, and any revision that omits it because it is inconvenient has done the thing this lesson exists to prevent.
This lesson deliberately ends the course without a verdict on whether technical analysis works. That is the honest state of the evidence and it is uncomfortable to teach. Do not let a later revision resolve it for the reader's comfort in either direction.