This project was inspired by a reality business show, Dragon's Den. There was one entrepreneur who made his money by trading stocks daily, using techinical analysis. He said that it was very mathematical, and that there were patterns he could recognize which would indicate when the trend of a certain stock would change. I then did some research and learned that there were specific patterns (established by ancient Japanese traders), which would appear when viewing a stock price using a candlestick chart.
I looked through these patterns and tried to find them myself, and I could see that when these patterns appeared, the stock trend reversed! A rising stock would then start to drop, and a falling stock would begin to rise. This was a tedious process however, so I started to design a java applet which would find and display whenver these patterns would occur.
The results weren't as great as I'd hoped. Right now, the algorithm is not sensitive enough, and is showing many false positives. Also, the program results a boolean for whether a pattern exists at a certain time or not. This could be improved to show a confidence level, rather than a yes or no. I intend to make this applet fetch hundreds of stocks rather than one at a time, and analyze all of them. The program would display the best stock to invest in, and a confidence percentage.
Although this program doesn't quite do its job (and I don't think it will be good enough to use any time soon), it was a fun experiment, and I learned a lot about stocks and about trend analysis.