At the moment, in the modern world, there are several approaches to the analysis of financial markets - fundamental, technical, fractal. Fundamental analysis is based on an analysis of the production and financial performance of each company in which they are going to invest money (Kijanica, 2005). Most often, investors in the fundamental analysis of the shares of one company take into account the values of such indicators as EBITDA, revenue, net income, net worth of the company, liabilities, cash flows, the amount of dividends paid and production indicators. All fundamental analysis is based on the assumption that at any moment in time the price of a share of a company is estimated incorrectly. However, the market is always trying to return to the true value of this price. Accordingly, the whole essence of the analysis comes down to identifying the real price of the company's share, comparing it with the present one and opening positions in the direction of the company's share movement from the current position to the true one. Technical analysis has a slightly different approach to estimating the price of a company's stock.
Technical analysis is a set of specific tools for probabilistic forecasting of stock prices in the past under similar circumstances (Erlich, 1996). Technical analysis does not consider the causes of price movement in the market, only the very fact of price movement, the direction and nature of this movement. Different methods of technical analysis rely on different values of prices and other indicators in the market, such as volumes, opening prices, closing prices, high and low price values. Technical analysis is based on three axioms (Erlich, 1996): All information about a stock is contained in the current price. This axiom implies that for successful activity in the stock market, it is only necessary to analyze the price of a share and its dynamics, not paying attention to external factors. .Prices move based on the trend.
If you look at price changes on a small scale, you get the impression that they are completely random. However, if you increase the number of observations, you can see some sequence, namely, a trend. Moreover, trends are constantly changing. .History is cyclical. This postulate embodies the fact that in similar circumstances, market participants act in the same way. The main technical analysis tools are price charts, trend lines, calculated lines and technical indicators.
In this study, an important role for the system being created is played by technical indicators that contain certain information about the time series on which they are built. Another method of analyzing financial markets is fractal analysis, or analysis based on chaos theory. Followers of fractal analysis are sure that the values of future prices depend on past changes, but unlike adherents of technical analysis, representatives of fractal analysis believe that the process of price formation in the market is globally determined and completely depends on the initial conditions and the past. Narrowing down to local values, at each moment the price has two possible scenarios of behavior. Fractal market analysis comes directly from fractal theory and borrows the properties of fractals to make predictions. 1.3 Rationale for the automation of exchange trading Classical trading in the minds of most people looks like this: a person buys a security at a certain point in time at a certain price value.
Then he waits for the price to rise to a certain point, then sells. Selling is also possible if the trader believes that the price should change direction soon. For one period of time t1, the trader earns y1 (see Figure 1), which is the difference between the buy position and the sell position. Figure 1. The process of trading in the stock market in the minds of most. However, if you pay attention, you can see that the price does not move linearly. Values constantly "jump".
This implies the conclusion that you can try to make money on these "leaps". If over the same period as in the first case, a trader makes five trades instead of one trade, then for the unchanged time period his profit increases significantly (see Figure 2). Figure 2. The process of trading in the stock market of those who seek to automate it. Of course, to make a quality decision on the market, a certain analysis is required, which takes some time, however, with the development of modern technologies, it is possible to automate the analysis process and get the opportunity to trade almost without wasting time on the analysis of certain indicators. Moreover, by automating the process of analyzing the market, technical indicators, stock prices, as well as building a model, it becomes possible to analyze several stocks at the same time, which also increases the potential possible profit of the investor.