Indian Journal of Science and Technology
Year: 2016, Volume: 9, Issue: 24, Pages: 1-5
Jung-Youn Lee and Sun-Myung Hwang*
Department of Computer Engineering, [email protected]
*Author For Correspondence
Department of Computer Engineering
Background/Objectives: In the trend stock market, when low frequency components determine wave form of stock price, MACD can be useful for predicting stock price. The MA and MACD occurs time delay and whipsaw problem. In order to use the MACD efficiently, we propose indicators are derived from the power measurement of the price waveform. Methods/ Statistical Analysis: The proposed method differentiates trend market against nontrend market. In this method, given stock signal is converted into the sum of many frequency components by using the fourier transform and the power of low frequency components is measured. Findings: When power values increase rapidly it is highly likely that market is in trend market and when the values linearly decrease then the inflection point in stock price waveform can be occurred. Therefore, once appropriate reference line is set up, one can determine that trend market is in progress if values increase passing the reference line, that opposite trend market after inflection point is in progress if values decrease passing the reference line using power calculation. Improvements/Applications: The market is determined as ‘trend market’ if the power value is larger enough, and it is remarkably helpful and particularly useful at automatic trading systems.
Keywords: Novel Index, Nontrend Market, Power Calculation, Power Value, Trend Market
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