engleski

Traders-Investors Decision Strategy by Rolling Estimates

The point of this paper is to make traders-investors decision strategies based on technical analysis. Technicians, sometimes called chartists, study supply and demand in a market in an attempt to determine what direction, or trend, will continue in the future. Technical analysis is a method of evaluating stocks by analyzing the statistics of the past prices movements and volume. Therefore, it uses charts and other tools such as indicators and oscillators to identify patterns that can suggest future movements. In technical analysis it has been shown that after a trend of price movements has been established, the future price movement is more likely to be in the same direction. Most technical trading strategies are based on this assumption. Different time ranges of investing and getting return in financial theory and practice are suggested by John Bollinger. Bollinger Bands are plotted at standard deviation levels above and below a moving average (EWMA). In this paper the rolling standard deviation of relevant prices is a measure of volatility. Using exponential smoothing methodology difference between short-term and long-term investment strategy is defined according to bull and bear signals. All theoretical statements are confirmed by estimation and prognostic movements of one of the most frequent component of CROBEX index on Zagreb Stock Exchange. According to the final technical analysis results, precise suggestions to buy or to sell on the Stock market are presented from the point of view of short-term and long-term strategy.

traders-investors decision strategies; technical analysis; Boolinger Bands estimates; rolling standard deviation estimates

nije evidentirano