Evaluating Market Conditions: A simplified Approach for Analyzing Stock Price Activity

Abstract

To simplify the process of determining which actions an investor should take, all application that provides a list of trade to be placed each morning was designed. Because the application gives signals on the long and the short side, users can make money in both rising and Falling markets and can minimize market risk by keepingmoney in both sides of the market. This application works by prompting the user for the stocks to be traded. Users can also tailor settings based on their personal investment style. Given these inputs, and using publicly available stock data, a comparison of current price levels relative to recent performance is made and the strength and the direction of market trends are measured. Based on these results, and using a methodology that the researchers developed, concrete buy, sell, and short commands are given to the user. While most trading theories fail in their inability to perform in different market conditions, the methodology that drives thic application has been shown to outperform market indices. Additionally, this theory provides evidence against the popularly accepted Random Walk theory. which states that it is impossible to accurately predict the direction in which the market will move.