Investment using technical analysis and fuzzy logic

Deploy fuzzy logic engineering tools in the 0nance arena, speci0cally in the technical analysis 0eld. Since technical analysis theory consists of indicators used by experts to evaluate stock prices, the new proposed method maps these indicators into new inputs that can be fed into a fuzzy logic system. The only required inputs to these indicators are past sequence of stock prices. This method relies on fuzzy logic to formulate a decision making when certain price movements or certain price formations occur. The success of the system is measured by comparing system output versus stock price movement. The new stock evaluation method is proven to exceed market performance and it can be an excellent tool in the technical analysis 0eld. The 5exibility of the system is also demonstrated. c © 2002 Elsevier Science B.V. All rights reserved.