A Compensatory Fuzzy Logic Model in Technical Trading
This work presents a novel approach to prediction of financial asset prices. Its main contribution is the combination of compensatory fuzzy logic and the classical technical analysis to build an efficient prediction model. The interpretability properties of the model allow its users to incorporate a...
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| Format: | Article |
| Language: | English |
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MDPI AG
2021-03-01
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| Series: | Axioms |
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| Online Access: | https://www.mdpi.com/2075-1680/10/1/36 |
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| author | Norma P. Rodríguez-Cándido Rafael A. Espin-Andrade Efrain Solares Witold Pedrycz |
| author_facet | Norma P. Rodríguez-Cándido Rafael A. Espin-Andrade Efrain Solares Witold Pedrycz |
| author_sort | Norma P. Rodríguez-Cándido |
| collection | DOAJ |
| description | This work presents a novel approach to prediction of financial asset prices. Its main contribution is the combination of compensatory fuzzy logic and the classical technical analysis to build an efficient prediction model. The interpretability properties of the model allow its users to incorporate and consider virtually any set of rules from technical analysis, in addition to the investors’ knowledge related to the actual market conditions. This knowledge can be incorporated into the model in the form of subjective assessments made by investors. Such assessments can be obtained, for example, from the graphical analysis commonly performed by traders. The effectiveness of the model was assessed through its systematic application in the stock and cryptocurrency markets. From the results, we conclude that when the model shows a high degree of recommendation, the actual financial assets show high effectiveness. |
| first_indexed | 2024-03-10T13:06:26Z |
| format | Article |
| id | doaj.art-16444ddc10ae4b29b6e1f34ba8759af8 |
| institution | Directory Open Access Journal |
| issn | 2075-1680 |
| language | English |
| last_indexed | 2024-03-10T13:06:26Z |
| publishDate | 2021-03-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Axioms |
| spelling | doaj.art-16444ddc10ae4b29b6e1f34ba8759af82023-11-21T11:03:08ZengMDPI AGAxioms2075-16802021-03-011013610.3390/axioms10010036A Compensatory Fuzzy Logic Model in Technical TradingNorma P. Rodríguez-Cándido0Rafael A. Espin-Andrade1Efrain Solares2Witold Pedrycz3Faculty of Accounting and Management, Universidad Autónoma de Coahuila, Torreon 27000, MexicoFaculty of Accounting and Management, Universidad Autónoma de Coahuila, Torreon 27000, MexicoFaculty of Accounting and Management, Universidad Autónoma de Coahuila, Torreon 27000, MexicoDepartment of Electrical and Computer Engineering, University of Alberta, Edmonton, AB T6G 2R3, CanadaThis work presents a novel approach to prediction of financial asset prices. Its main contribution is the combination of compensatory fuzzy logic and the classical technical analysis to build an efficient prediction model. The interpretability properties of the model allow its users to incorporate and consider virtually any set of rules from technical analysis, in addition to the investors’ knowledge related to the actual market conditions. This knowledge can be incorporated into the model in the form of subjective assessments made by investors. Such assessments can be obtained, for example, from the graphical analysis commonly performed by traders. The effectiveness of the model was assessed through its systematic application in the stock and cryptocurrency markets. From the results, we conclude that when the model shows a high degree of recommendation, the actual financial assets show high effectiveness.https://www.mdpi.com/2075-1680/10/1/36share tradinginvestment modelingknowledge interpretabilitycomputational intelligence |
| spellingShingle | Norma P. Rodríguez-Cándido Rafael A. Espin-Andrade Efrain Solares Witold Pedrycz A Compensatory Fuzzy Logic Model in Technical Trading Axioms share trading investment modeling knowledge interpretability computational intelligence |
| title | A Compensatory Fuzzy Logic Model in Technical Trading |
| title_full | A Compensatory Fuzzy Logic Model in Technical Trading |
| title_fullStr | A Compensatory Fuzzy Logic Model in Technical Trading |
| title_full_unstemmed | A Compensatory Fuzzy Logic Model in Technical Trading |
| title_short | A Compensatory Fuzzy Logic Model in Technical Trading |
| title_sort | compensatory fuzzy logic model in technical trading |
| topic | share trading investment modeling knowledge interpretability computational intelligence |
| url | https://www.mdpi.com/2075-1680/10/1/36 |
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