scholarly journals RANDOM STRATEGY VERSUS TECHNICAL ANALYSIS STRATEGY IN THE US MARKET

2020 ◽  
Author(s):  
Miroslav Svoboda ◽  
◽  
Martina Sponerová ◽  
Keyword(s):  
Market Research ◽  
Technical Analysis ◽  
Relative Strength ◽  
Strength Index ◽  
Random Strategy ◽  
The Us ◽  
Analysis Strategy ◽  
Strategy Versus ◽  
Similar Risk ◽  
Interesting Alternative

Random strategy is currently an interesting alternative to traditional trading of financial instruments. The paper builds on existing research into the trading of investment instruments through random strategy and strategies based on technical analysis. The highly liquid USD/CAD currency pair was chosen for the US market research. We analyze five years of data, and in every intraday trading session, only a single position will be opened. Technical analysis strategy uses essential indicators such as Bollinger Bands, relative strength index (RSI), moving averages (MA) and other. Every trading position will have the risk-reward ratio (RRR) 3 to 1. In addition, another trading positions on the USD/CAD currency pair will be opened without technical analysis. The time of entry into position will be indicated randomly with a similar risk-reward ratio (RRR) 3 to 1. The aim of this paper is to assess which of the above strategies is more suitable for the investor. In other words, this paper aims to compare the strategy of technical analysis and the random strategy in intraday trading concerning the profitability of these trades. We expect that a random strategy will be more suitable for the investor in many points.

scholarly journals RANDOM STRATEGY VERSUS TECHNICAL ANALYSIS STRATEGY: THE CASE OF EUR/USD INTRADAY TRADING

2020 ◽  
Vol 3 (1) ◽  
pp. 34-39
Author(s):  
Miroslav Svoboda ◽  
Martina Sponerová
Keyword(s):  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Technical Analysis ◽  
Moving Averages ◽  
Exchange Market ◽  
Random Strategy ◽  
Analysis Strategy ◽  
Strategy Versus ◽  
Similar Risk

This paper provides a comparison between the strategy based on technical analysis and the strategy based on random trading on a highly liquid EUR/USD foreign exchange market. The authors analyze three years of data, and in every intraday trading session. Technical analysis strategy uses essential indicators such as moving averages (MA). Every trading position will have the risk-reward ratio (RRR) 3 to 1. In addition, another trading positions on the EUR/USD currency pair will be opened at the same time each day, without technical analysis. The time of entry into position will be indicated by past high liquidity on a given currency pair at a given time with a similar risk-reward ratio (RRR) 3 to 1. This paper aims to compare the strategy of technical analysis and the random strategy in intraday trading concerning the profitability of these trades.

MOMENTUM OSCILLATORS - A TOOL TO PREDICT STOCK PRICE BEHAVIOUR

2016 ◽  
Vol 12 (1) ◽  
Author(s):  
Shishir Kumar Gujrati
Keyword(s):  
Stock Price ◽  
Moving Average ◽  
Technical Analysis ◽  
Relative Strength ◽  
Future Price ◽  
Range Data ◽  
Strength Index ◽  
Price Trends ◽  
Past Data ◽  
Price Movements

Stock markets are always taken as the barometer of the economy. The price movement of their indices reflects every ups and downs of the economy. Although seem to be random, these price movements do follow a certain track which can be identified using appropriate tool over long range data. One such method is of Technical Analysis wherein future price trends are forecasted using past data. Momentum Oscillators are the important tools of technical analysis. The current paper aims to identify the previous price movements of sensex by using Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) tools and also aims to check whether these tools are appropriate in forecasting the price trends or not.

Candle charts for financial technical analysis

2019 ◽  
Vol 19 (1) ◽  
pp. 200-209 ◽  
Author(s):  
Mehmet F. Dicle
Keyword(s):  
Moving Average ◽  
Visual Representations ◽  
Technical Analysis ◽  
Relative Strength ◽  
Financial Industry ◽  
Strength Index ◽  
Research And Teaching ◽  
Industry Research ◽  
The Individual

Technical analysis is an important part of financial industry, research, and teaching. The methodology has two parts: i) calculation of the individual tools and ii) visual representations. In this article, I provide a community-contributed command, candlechart, to draw the most common technical analysis charts. My intent is to draw these charts similarly to industry examples. The popular candle price chart is combined with charts for volume, moving-average convergence divergence, relative strength index, and Bollinger bands.

scholarly journals Optimization of investment management in Warsaw stock market

2014 ◽  
Vol 15 (2) ◽  
pp. 143-156 ◽  
Author(s):  
Maciej Janowicz ◽  
Arkadiusz Orłowski ◽  
Franciszek Michał Warzyński
Keyword(s):  
Stock Market ◽  
Time Perspective ◽  
Moving Average ◽  
Technical Analysis ◽  
Relative Strength ◽  
Optimal Management ◽  
Brute Force ◽  
Exchange Market ◽  
Strength Index ◽  
Optimal Values

Abstract Application of simple prescriptions of technical analysis on the Warsaw Exchange Market (GPW) has been analyzed using several stocks belonging to WIG20 group as examples. Only long positions have been considered. Three well-known technical-analysis indicators of the market have been investigated: the Donchian channels, the Relative Strength Index, and Moving Average Convergence-Divergence indicator. Optimal values of parameters of those indicators have been found by „brute force“ evaluation of (linear) returns. It has been found that trading based on both Donchian channels and Relative Strength Index easily outperform the „buy and hold“ strategy if supplied with optimal values of parameters. However, those optimal values are by now means universal in the sense that they depend on particular stocks, and are functions of time. The optimal management of capital in the stock market strongly depends on the time perspective of trading. Finally, it has been argued that the criticism of technical analysis which is often delivered by academic quantitative financial science is unjustified as based of false premises.

scholarly journals Effectiveness of Technical Analysis Signals Around the Earning Announcements in Malaysian Stock Market

2018 ◽  
Vol 7 (3.21) ◽  
pp. 109
Author(s):  
Kelvin Lee Yong Ming ◽  
Mohamad Jais
Keyword(s):  
Stock Market ◽  
Stock Exchange ◽  
Moving Average ◽  
Technical Analysis ◽  
Relative Strength ◽  
Kuala Lumpur ◽  
Earning Announcement ◽  
Strength Index ◽  
Corporate Announcements ◽  
Technical Indicator

Technical analysis is an analysis that widely applied by the investor in the stock market. However, various corporate announcements could cause the market to react, and the most significant corporate announcement is the earnings announcement (1). Thus, this study examines the effectiveness of technical analysis signals around the earning announcements dates in Malaysian stock market. In doing so, this study applied and tested four technical indicators, namely Simple Moving Average (SMA), Relative Strength Index (RSI), Stochastic (K line), and Moving Average Convergence/Divergence (MACD) in Malaysian stock market. The sample of this study consisted of 30 largest capitalization companies from the main market of Kuala Lumpur Stock Exchange (KLSE). Meanwhile, the sample period covered from 2nd January 2014 to 31st March 2016. This study found that Moving Average Convergence/Divergence (MACD) significantly produced higher returns as compared to the other technical indicator before the earning announcement dates in financial year 2014 and 2015. The combined indicator of MA-MACD also found to have higher return in financial year 2015. The findings conclude that the technical analysis signals can be used to generate returns before earning announcement dates.  

scholarly journals A Research on Trading of Sensex Stocks by using RSI

2019 ◽  
Vol 8 (9S2) ◽  
pp. 14-22
Keyword(s):  
Technical Analysis ◽  
Relative Strength ◽  
Strength Index ◽  
Data Set ◽  
Daily Data

This study has the aim of doing advanced research on technical analysis by finding reliability of buy or sell signals generated by the Relative Strength Index tool. In this study, the RSI tool is tested on Sensex components (30 stocks) for the last six months. The data set for this study had been the daily data, taken from NSE and BSE website. The study compares the return from RSI recommendations and simple buy and hold strategy returns. The study also aims at testing the RSI tool for its probability of generating false buy sell signals. The findings of this study clearly indicate that RSI can be a powerful tool in the markets over buy and hold strategy. The study also makes it clear that the probabilities of false signals are also limited.

scholarly journals Technical Financial Analysis Tools for Stata

2017 ◽  
Vol 17 (3) ◽  
pp. 736-747 ◽  
Author(s):  
Mehmet F. Dicle ◽  
John D. Levendis
Keyword(s):  
Financial Analysis ◽  
Moving Average ◽  
Technical Analysis ◽  
Relative Strength ◽  
Analysis Tool ◽  
Investment Strategies ◽  
Moving Averages ◽  
Strength Index ◽  
Analysis Tools

In this article, we provide four financial technical analysis tools: moving averages, Bollinger bands, moving-average convergence divergence, and the relative strength index. The tftools command is used with four subcommands, each referring to a technical analysis tool: bollingerbands, macd, movingaverage, and rsi. We provide examples for each tool. tftools allows researchers to backtest their own investment strategies and will be of interest to investors, researchers, and students of finance.

scholarly journals Technical analysis on select stocks of banking sector

2016 ◽  
Vol 6 (3) ◽  
pp. 231-242
Author(s):  
Sharmila R ◽  
Kavitha R ◽  
Ananthi S
Keyword(s):  
Banking Sector ◽  
Weather Forecasting ◽  
Stock Exchange ◽  
Moving Average ◽  
Technical Analysis ◽  
Relative Strength ◽  
Rate Of Change ◽  
Strength Index ◽  
Price Movements ◽  
Over Time

Technical Analysis is the forecasting of future financial price movements based on an examination of past price movements. Like weather forecasting, technical analysis does not result in absolute predictions about the future. Instead, technical analysis can help investors anticipate what is “likely” to happen to prices over time. Technical analysis uses a wide variety of charts that show price over time. This study is based on the analysis of four Nifty Bank Index stocks namely Axis Bank, Bank of Baroda, State Bank of India and ICICI bank listed in National Stock Exchange. Technical indicators such as Relative strength index (RSI), Rate of change (ROC) and Moving Average (MA) are used in the study. This paper aims at carrying out Technical Analysis of the securities of the selectedbanking stocks and to assist investment decisions in this Indian Market.

scholarly journals Technical Analysis To Determine Buying And Selling Signal In Stock Trade

2020 ◽  
Vol 9 (1) ◽  
pp. 58-67
Author(s):  
Rommy Pramudya ◽  
Rommy Pramudya
Keyword(s):  
Moving Average ◽  
Technical Analysis ◽  
High Accuracy ◽  
Relative Strength ◽  
Strength Index ◽  
Single Indicator ◽  
The Difference ◽  
The Right ◽  
Very High

The purpose of this study is to determine which indicators are more capable of showing more accurate sell and buy signals on the LQ45 index by using the oscillator indicator Moving Average Divergent Convergent (MACD), Bollinger Band, and Relative Strength Index (RSI). The results in this study indicate that the sell signal can be captured well by the Bollinger band and MACD indicators, but it cannot be captured properly by the RSI, the volume can be small or heading and are in the side ways, while the MACD plays a too slow role in capturing the signal buy compared to Bollinger bands and RSI. The use of a single indicator will never show a buy and sell signal that is really accurate, this is based on the results of research that shows the difference in timeliness in Bollinger, RSI and also MACD so that the combination of several types of indicators will be better compared to using single indicators. Although in statistics there are no significant differences, there are only differences in increment and improvement in the placement of existing values, but in this case, the order of this value is crucial for traders because it requires very high accuracy to determine the right decision in daily transactions.

scholarly journals Use of the Black and Scholes model in the pricing of purchasing options based on the index of the Iraq Stock Exchange for the period from 6/2 to 25/2/2019

2019 ◽  
Vol 5 (2) ◽  
pp. 68
Author(s):  
Ammar Shihab Ahmed
Keyword(s):  
Stock Market ◽  
Financial Markets ◽  
Stock Exchange ◽  
Investment Decisions ◽  
Technical Analysis ◽  
Relative Strength ◽  
Financial Indicators ◽  
Strength Index ◽  
The Future ◽  
The Impact

Due to the increasing number of interested investors in the rights of options, it is necessary to highlight this section of the financial markets, and that one of the main reasons for increasing the attractiveness of investors in this type of market is the reduction of capital required to invest in it, and contribute to maximize their profitability if true (Investors 'profits are unlimited) and reduce their losses to a certain extent (investors know in advance the amount of their losses before the turnout of investment) if their expectations are unhealthy. Investors' losses are determined by the amount of the bonus they pay to the contract editor, After the pricing of the contracts of the rights of the purchase choice, they will be certain of the size of the losses they will incur if their expectations for the future are incorrect, and many techniques of technical analysis help investors to predict the future prices of securities or financial indicators. In the research is the relative strength index, and through this indicator, investors can determine whether the prices in the stock market sold at high or low prices, contributing to the impact on the value of the index of the stock market, so the prospect of the future helps investors In making their investment decisions to buy buying rights in the event of higher prices in the future. Conversely, the expectation of lower prices in the future investors are selling purchase rights rights contracts, and thus achieve profits in both cases.Keywords: Black & Schulz model, RSI, financial choice, pricing of purchase choice.

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