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A stock trading expert system based on the rule-base evidential reasoning using Level 2 Quotes
Abstract:

Generally, stock trading expert systems (STES) called also ‘‘mechanical trading systems’’ are based on the technical analysis, i.e., on methods for evaluating securities by analyzing statistics generated by the market activity, such as past prices and volumes (number of transactions during a unit of a timeframe). In other words, such STES are based on the Level 1 information. Nevertheless, currently the Level 2 information is available for the most of traders and can be successfully used to develop trading strategies especially for the day trading when a significant amount of transactions are made during one trading session. The Level 2 tools show in-depth information on a particular stock. Traders can see not only the ‘‘best’’ bid buying) and ask (selling) orders, but the whole spectrum of buy and sell orders at different volumes and different prices. In this paper, we propose some new technical analysis indices bases on the Level 2 and Level 1 information which are used to develop a stock trading expert system. For this purpose we adapt a new method for the rule-base evidential reasoning which was presented and used in our recent paper for building the stock trading expert system based the Level 1 information. The advantages of the proposed approach are demonstrated using the developed expert system optimized and tested on the real data from the Warsaw Stock Exchange

Keywords: Fuzzy logic Rule-base evidential reasoning Stock trading Expert system
Author(s): .
Source: Expert Systems with Applications 39 (2012) 7150–7157
Subject: مدیریت مالی
Category: مقاله مجله
Release Date: 2012
No of Pages: 8
Price(Tomans): 0
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