Corporate Financial Management in Facing Tax Changes

 

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Title: The Influence of Technical Analysis on Traders' Investment Decisions in the Stock Market

Introduction:

In the dynamic and often unpredictable landscape of the stock market, traders employ a variety of strategies to inform their investment decisions. Among these, technical analysis has emerged as a widely-used method for forecasting price movements based on historical market data, such as price charts, trading volume, and other market indicators. Unlike fundamental analysis, which evaluates a company's intrinsic value, technical analysis focuses on identifying patterns and trends that can suggest future activity.

This research explores how technical analysis influences the decision-making processes of retail and institutional traders. It examines the degree to which traders rely on technical indicators (e.g., moving averages, RSI, MACD, candlestick patterns) when making buy or sell decisions, and how such reliance affects trading performance, risk management, and market behavior.

Objectives:

• To assess the prevalence of technical analysis usage among traders.
• To identify the most commonly used technical indicators and tools.
• To evaluate the effectiveness of technical analysis in predicting stock price movements.
• To analyze how technical analysis impacts traders’ confidence and decision-making processes.

Research Questions:

1. How extensively is technical analysis used among different types of traders?
2. Which technical indicators do traders consider most reliable?
3. What is the perceived and actual impact of technical analysis on investment returns?
4. Does technical analysis contribute to market trends, herd behavior, or bubbles?

Significance of the Study:

Understanding the role of technical analysis in investment decision-making can provide insights into market behavior and psychology. It can also help investors, educators, and financial analysts better understand the risks and rewards of various trading strategies, ultimately contributing to more informed participation in the financial markets.

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