Implementation of Fibonacci Retracements and Exponential Moving Average (EMA) Trading Strategy in Indonesia Stock Exchange

Based on KSEI statistic data on March 2021, IDX individual stock market investor is increasing 199% compared to 2018 becoming 4,848,954 number of investors. 56.9% population of the individual investor is having ages that less than 30 years. In the period where IDX was bullish in November 2020 - January 2021, there is a phenomenon where stocks influencers appeared in social media and impacted to the stock price movement after the announcement is done by the influencer. In contrary, during bearish and sideways condition, those influencers were gone and changed with bad news that went viral where many individual investors are lost their capital in IDX. They lose money since they are gambling in the stock market without any analysis and no establishment of trading plan. This research is aimed as a strategy to individual investors in IDX to implement trading strategy based on Fibonacci retracements and projections, EMA lines, trendlines, stochastic, and volume. Back testing is conducted in IDX SMC Liquid index constituents during January 2018 until December 2020 period. By implementing this trading strategy, return generated is 164% for 3 years trading time frame. Author also found that this trading strategy is effective in bullish trend condition especially for individual investors that have long position.

Investigating association between factors fostering attention to a stock and rationales to buy it: an empirical analysis

PurposeCan something that drives our initial attention toward a stock have any implications on final decision to buy it? This paper empirically and statistically tests association, if any, between factors fostering attention toward a stock and rationales to buy it.Design/methodology/approachThis paper uses survey responses of individual investors involving multiple response categorical data. Association between attention fostering factors and rationales is tested using a modified first-order corrected Rao-Scott chi-square test statistic (to adjust for within-participant dependence among responses in case of multiple response categorical variables). Further, odds ratios and mosaic plots are used to determine the effect size of association.FindingsStrong association is seen between attention fostering factors and rationales to buy a stock. Further, strongest associations are seen in cases where origin is the same underlying influencing factor. Some of the most cited attention fostering factors and rationales in this research stem from familiarity bias and expert bias.Practical implicationsWhat starts as a trivial attention fostering factor, which may not even be recognized by majority investors, can go on to become one of the rationales for buying a stock. This can result in substantial financial implications for an individual investor. Investor education agencies and regulatory authorities can make investors cognizant of such association, which can help investors to improve and adjust their decision making accordingly.Originality/valueThe extant literature discusses factors/biases influencing buying decisions of individual investors. This research takes a step ahead by distinguishing these factors in terms of whether they play role of (1) fostering attention toward a stock or (2) of reasons for ultimately buying it. Such dissection of factors/biases, to the best of authors' knowledge, has not been done previously in any empirical and statistical analysis. The paper uses multiple response categorical data and applies a modified first-order corrected Rao-Scott chi-square statistic to test association. Application of the above-mentioned test statistic has not been done previously in context of individual investor decision-making.

Information search in times of market uncertainty: an examination of aggregate and disaggregate uncertainty

PurposeThis study explores the association between individual investor information demand and two measures of market uncertainty – aggregate market uncertainty and disaggregate industry-specific market uncertainty. It extends the literature by being the first to empirically examine investor information demand and disaggregate market uncertainty.Design/methodology/approachThis paper constructs a measure of information search by using the Google Search Volume Index and computes measures of aggregate and disaggregate market uncertainty using institutional investors' trading data from Ancerno Ltd. The relation between market uncertainty, as measured by trading disagreements among institutional investors, and information search is analyzed using an OLS (Ordinary Least Squares) regression model.FindingsThis paper finds that individual investor information demand is significantly and positively correlated with aggregate market uncertainty but not associated with disaggregated industry uncertainty. The findings suggest that individual investors may not fully incorporate all relevant uncertainty information and that ambiguity-related market pricing anomalies may be more associated with disaggregate market uncertainty.Research limitations/implicationsThis study presents an examination of aggregate and disaggregate measures of market uncertainty and individual investor demand for information, shedding light on the efficiency of the market in incorporating information. A limitation of our study is that our data for market uncertainty is based on investor trading disagreement from Ancerno, Ltd. which is only available till 2011. However, we believe the implications are generalizable to the current time period.Practical implicationsThis study provides the first concurrent empirical assessment of investor information search and aggregate and disaggregate market uncertainty. Prior research has separately examined information demand in these two types of market uncertainty. Thus, this study provides information to investors regarding the importance of assessing disaggregate component measures of the market.Originality/valueThis paper is the first to empirically examine investor information search and disaggregate market uncertainty. It also employs a unique data set and method to determine disaggregate, and aggregate, market uncertainty.

A Study on Investment Behaviour and Attitude of Women Investors of Bangalore, Karnataka

Investment is one of the pre – eminent concern of every single individual investor as the small savings of today are to meet the future expenses of tomorrow. Considering the survey over 120 respondents from Bangalore City among women, this paper attempts to study the behaviour and attitude of investment based on the socio-economic profile, awareness and preferences and financial literacy over various investment avenues that are available in India. The study was conducted during the pandemic period from March to July as many of the women investors resulted in unemployment that affected their income, earnings and savings. Fort the study the data was collected using structured questionnaires. The result showed that most of the women investors belongs to a less age group as they are into a working class and to which most of them are comfortable in traditional mode of investment such as secured deposits. The study also revealed investment in stock market is bit sceptical as it involves high risk and uncertainty. The result also says the psychological behaviour of Indian women as they are fond of bullion and investing in bullion metals is quite attractive and low risk. From the study point, it will help to explore and expand knowledge and identify the best avenue to invest and create savings for the better future in the field of personal finance and pandemic recession.

IMPACT OF BEHAVIOURAL BIASES IN CHOOSING INVESTMENT AVENUES: AN EMPIRICAL STUDY

The behaviour of an individual investor is expansively influenced by different biases that came into limelight in the rising regulation of behaviour finance. In finance, behavioural finance is the latest regulation that studies the cognitive psychology of the decisions that are taken by an individual related to money. The theory of standard economic had evolved this in its response and it has the ability to presume that people are sensible, prefers low risks investments and maximises their profits. In real time scenario it is seen that people are not that sensible when they make their decisions during the investment process. There are different behavioral biases factors that influence the investors while choosing their investment avenues. The objective of the study is to know the behavioural factors that affect the decision of the Investors and their impact on the investor in choosing the investment avenues. A sample of 273 respondents were taken in which Investors from different sector were surveyed with the help of standard questionnaire. Mean and t test was used to get appropriate results. It is found that there are different behavioral factors such as mood, emotional, heuristic, personality and overconfidence that influence the investors while making his investments and all the behavioural biases has a significant impact on the process of choosing the investment avenues. KEYWORDS: Behavioural Biases, Behavioural Finance, Investment Avenues, Investors.

Individual Investors' Financial Behaviour and Financial Attitude: Role of Financial Literacy as Moderator in Decision Making

As an individual investor, it is incredible to have a successful performance return without financial knowledge. An organization's performance must be measured and analysed based on an adequate financial management system. In today's multifaceted financial scenery Financial Literacy is crucial as it does not only impact financial decisions at the business level but is also important for the country's development. Financial literacy has the importance of the backbone of society. The study adds a new mechanism of financial literacy. The main objective of this study is to determine further insight into the role of financial literacy on an individual's behaviour and attitude towards financial decision making. For analysis, the moderator impact of financial literacy on decision-making data of 100 individual investors has been collected from different banking sectors of Pakistan. The result of this study shows that financial literacy has a significant impact on financial decision making. This study delivers knowledge that can contribute to guiding coming studies, making policies, directors and instructors in their teaching.