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An Early Warning Model with Technical Trading Indicators

Author

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  • Kutluk Kagan Sumer

    (Istanbul University)

Abstract

In this study, the technical indicators are used in forecasting whether stock prices will rise, fall or will be constant at the following day. The indicators are generated by taking into account the daily stock returns. If the daily stock returns are positive, the indicator is coded as “+1”; if the daily stock returns are constant, the indicator is coded as “0” and at least if the daily stock returns are negative, the indicator is coded as “-1”. These indicator values express the dependent vari-able of ordered choice models which independent variables are technical indicators. The ordered choice models are ap-plied to all of the stocks of ISE (Istanbul Stock Exchange).

Suggested Citation

  • Kutluk Kagan Sumer, 2015. "An Early Warning Model with Technical Trading Indicators," Eurasian Academy Of Sciences Social Sciences Journal, Eurasian Academy Of Sciences, vol. 1(1), pages 1-20, January.
    • Handle: RePEc:eas:journl:v:1:y:2015:i:1:p:1-20
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    More about this item

    Keywords

    Stock Exchange; ISE; Technical Analysis; Technical Indicators; Early Warning; Ordered Choice;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G1 - Financial Economics - - General Financial Markets

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