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Pattern Recognition in the Japanese Candlesticks

  • Leszek Chmielewski
  • Maciej Janowicz
  • Joanna Kaleta
  • Arkadiusz Orłowski
Chapter
Part of the Advances in Intelligent Systems and Computing book series (AISC, volume 342)

Abstract

Pattern recognition analysis based on \(k\)-nearest neighbors classifiers is applied to the representation of the stock market dynamics with the help of the Japanese candlesticks augmented by the accompanying volume of transactions. Examples from a post-emerging Warsaw stock market are given. Conditions under which the Japanese candlesticks appear to have a reasonable predictive power are provided. The dependence of the results on the number of nearest neighbors, the length of the candlestick sequence, and the forecast horizon are shown. Possible ways of the forecast improvement are discussed.

Keywords

Pattern recognition Stock market forecast Japanese candlesticks \(k\)-Nearest Neighbors 

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Copyright information

© Springer International Publishing Switzerland 2015

Authors and Affiliations

  • Leszek Chmielewski
    • 1
  • Maciej Janowicz
    • 1
  • Joanna Kaleta
    • 1
  • Arkadiusz Orłowski
    • 1
  1. 1.Faculty of Applied Informatics and Mathematics (WZIM)Warsaw University of Life Sciences (SGGW)WarsawPoland

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