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Prediction of Trend Reversals in Stock Market by Classification of Japanese Candlesticks

  • Leszek J. Chmielewski
  • Maciej Janowicz
  • Arkadiusz Orłowski
Conference paper
Part of the Advances in Intelligent Systems and Computing book series (AISC, volume 403)

Abstract

K-means clustering algorithm has been used to classify patterns of Japanese candlesticks which accompany the approach to trend reversals in the prices of several assets registered in the Warsaw stock exchange (GPW). It has been found that the trend reversals seem to be preceded by specific combinations of candlesticks with notable frequency. Surprisingly, the same patterns appear in both “bullish” and “bearish” trend reversals. The above findings should stimulate further studies on the problem of applicability of the so-called technical analysis in the stock markets.

Keywords

Clustering K-means Trend reversals Japanese candlesticks 

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Copyright information

© Springer International Publishing Switzerland 2016

Authors and Affiliations

  • Leszek J. Chmielewski
    • 1
  • Maciej Janowicz
    • 1
  • Arkadiusz Orłowski
    • 1
  1. 1.Faculty of Applied Informatics and Mathematics (WZIM)Warsaw University of Life Sciences (SGGW), PolandWarsawPoland

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