Title: A cellular automata model for safe investment based on expert's recommendations

Authors: Tessy Mathew; L. Jeganathan; U. Srinivasa Rao

Addresses: School Computing Science and Engineering, VIT University Chennai, Vandallur-Kelambakam Road, India ' School Computing Science and Engineering, VIT University Chennai, Vandallur-Kelambakam Road, India ' School Computing Science and Engineering, VIT University Chennai, Vandallur-Kelambakam Road, India

Abstract: Traditional stock trading methodologies (ARMA, ARIMA, regression, etc.) are used to analyse price behaviour and then produce signals namely BUY, SELL or HOLD. Our proposed work is to develop a one-dimensional cellular automata model that helps new investors who have zero knowledge on stock market trades. The one-dimensional cellular automata (1D CA) model processes the existing recommendations or advices from the experts who possess a very good knowledge on stock market trades. Based on different expert recommendations, the CA model will give financial alerts that will help the investor to take buy/hold/sell decision on stocks. Hence new investors can either make a profit or at least keep them in safe zone (minimum loss). The trading rules in this model give highest priority to sell the share and lowest priority to buy the share. This model gives recommendations to investors regarding the selling, buying and holding of a stock/stock segment.

Keywords: stock market; cellular automata; complexity; investment behaviour.

DOI: 10.1504/IJEBR.2017.087524

International Journal of Economics and Business Research, 2017 Vol.14 No.3/4, pp.390 - 400

Received: 28 Nov 2016
Accepted: 14 Jun 2017
Published online: 16 Oct 2017 *

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