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.
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Chmielewski, L.J., Janowicz, M., Orłowski, A. (2016). Prediction of Trend Reversals in Stock Market by Classification of Japanese Candlesticks. In: Burduk, R., Jackowski, K., Kurzyński, M., Woźniak, M., Żołnierek, A. (eds) Proceedings of the 9th International Conference on Computer Recognition Systems CORES 2015. Advances in Intelligent Systems and Computing, vol 403. Springer, Cham. https://doi.org/10.1007/978-3-319-26227-7_60
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