2014•Journal of Sichuan University of Science & EngineeringRequires access

Application of Stationary Technical Indicator in Stock Trading Based on BOLL

Deng We

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Abstract

In recent decades,the rapid development of the stock trading in the financial market causes the extensive concern of the financial world. Therefore,building a reasonable model of stock trading strategy is necessary. BOLL indicator is a commonly used technical analysis tool in the stocks. A new stationary technical indicator which is suitable for stock trading strategy modeling,is constructed based on BOLL indicator. The stability of the new indicator is verified under the hypothesis that the stock prices behave as the geometric Brown motion. Finally,a stock trading strategy based on practical application is constructed to test its effectiveness and profitability. All those put forward a kind of trading thought in stock trading.

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What this paper is about

In recent decades,the rapid development of the stock trading in the financial market causes the extensive concern of the financial world. Therefore,building a reasonable model of stock trading strategy is necessary. BOLL indicator is a commonly used technical analysis tool in the stocks. A new stationary technical indicator which is suitable for stock trading strategy modeling,is constructed based on BOLL indicator. The stability of the new indicator is verified under the hypothesis that the stock prices behave as the geometric Brown motion. Finally,a stock trading strategy based on practical application is constructed to test its effectiveness and profitability. All those put forward a kind of trading thought in stock trading.

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Available abstract

In recent decades,the rapid development of the stock trading in the financial market causes the extensive concern of the financial world. Therefore,building a reasonable model of stock trading strategy is necessary. BOLL indicator is a commonly used technical analysis tool in the stocks. A new stationary technical indicator which is suitable for stock trading strategy modeling,is constructed based on BOLL indicator. The stability of the new indicator is verified under the hypothesis that the stock prices behave as the geometric Brown motion. Finally,a stock trading strategy based on practical application is constructed to test its effectiveness and profitability. All those put forward a kind of trading thought in stock trading.

Key concepts: Profitability index, Stock (firearms), Trading strategy, Technical analysis, Algorithmic trading, Stock market, Financial economics, Econometrics

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