Momentum Trading, Contrarian Trading and Smart Money Manipulation

Liao, Ching‐Jong

doi:10.5539/ibr.v10n2p53

Cited by 8 publications

(3 citation statements)

References 15 publications

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“…Momentum and contrarian strategies are two of the most hotly discussed profitgenerating investment methods [44][45][46]. Momentum trading can result in short-term profits depending on recent share price moves [47].…”

Section: Investing Strategiesmentioning

confidence: 99%

Mastery of “Monthly Effects”: Big Data Insights into Contrarian Strategies for DJI 30 and NDX 100 Stocks over a Two-Decade Period

Chiu,

Huang,

Day

et al. 2024

Mathematics

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In contrast to finding better monthly performance shown in a specific month, such as the January effect (i.e., better stock price performance in January as opposed to other months), which has been extensively studied, the goal of this study is to determine whether investors would obtain better subsequent performance as technical trading signals emitted in a specific month because, from the investment perspective, investors purchasing stocks now would not know their performance until later. We contend that our analysis emphasizes its critical role in steering investment decisions and enhancing profitability; nonetheless, this issue appears to be overlooked in the relevant literature. As such, utilizing big data to analyze the constituent stocks of the DJI 30 and NDX 100 indices from 2003 to 2022 (i.e., two-decade data), this study investigates whether trading these stocks as trading signals emitted via contrarian regulation of stochastic oscillator indicators (SOIs) and the relative strength index (RSI) in specific months would result in superior subsequent performance (hereafter referred to as “monthly effects”). This study discovers that the oversold signals generated by these two contrarian regulations in March were associated with higher subsequent performance for holding 100 to 250 trading days (roughly one year) than other months. These findings highlight the importance of the trading time and the superiority of the RSI over SOIs in generating profits. This study sheds light on the significance of oversold trading signals and suggests that the “monthly effect” is crucial for achieving higher returns.

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Section: Investing Strategiesmentioning

confidence: 99%

Mastery of “Monthly Effects”: Big Data Insights into Contrarian Strategies for DJI 30 and NDX 100 Stocks over a Two-Decade Period

Chiu,

Huang,

Day

et al. 2024

Mathematics

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show abstract

“…Concerning trading strategies, momentum and contrarian strategies are the major investment strategies widely debated by investment strategists across the world (Aravind 2016); they are adopted for profit-making (Liao 2017). Duxbury and Yao (2017) claim that momentum can be defined as buying positive-return stocks and selling negativereturn stocks.…”

Section: Technical Analysis and Trading Strategiesmentioning

confidence: 99%

Can investors profit by utilizing technical trading strategies? Evidence from the Korean and Chinese stock markets

Day

Cheng

et al. 2022

Financ Innov

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The idea of this study is derived from observing the profitability of stock investments following the phenomena of continuously rising (or falling) prices of stocks and continuously overbought (or oversold) signals emitted by technical indicators. We employ the standard event study approach and technical trading strategies to explore whether investors would exploit profits in trading the constituent stocks of the Korea Composite Stock Price Index 50 and Shanghai Stock Exchange 50 when the aforementioned continuous phenomena occur. We find that both the Korean and Chinese stock markets are not fully efficient; this finding may enhance the robustness of the existing literature. In addition, we reveal that contrarian strategies are appropriate for the trading stocks listed on the Korean stock market for all the cases investigated in this study. However, momentum strategies are appropriate for the Chinese stock market when continuously rising stock prices and overbought signals are simultaneously observed. These findings imply that the difference in investor behaviors between the Korean and Chinese stock markets might result in dissimilar trading strategies being employed for these two markets.

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“…Covid-19: Efek pada Saham yang Terdaftar di Jakarta Islamic Index (JII) (Vivi Indah Bintari dan Deasy Lestary Kusnandar) harga saham, dan melihat kemungkinan penyebab yang mempengaruhi keuntungan untuk kedua jenis investor irasional ini. peneliti menduga rational informed investor mempengaruhi prilaku irational investor (Liao, 2017). Informed investor memanipulasi harga aset, dan mengarah ke fenomena makro momentum dan reversal.…”

Section: Tinjauan Pustakaunclassified

Covid-19: Efek Pada Saham Yang Terdaftar Di Jakarta Islamic Index (Jii)

Bintari

Kusnandar

2022

Procuratio

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COVID-19 telah memengaruhi komunitas, Bisnis, dan organisasi secara global, yang secara otomatis mempengaruhi pasar keuangan dan ekonomi. Hal tersebut menyebabkan terjadinya penurunan yang signifikan pada kondisi pasar modal di Indonesia. Sehingga Bursa Efek Indonesia mengeluarkan pengumuman surat keputusan dewan direksi Bursa Efek Indonesia mengenai perubahan waktu perdagangan tentang transaksi pertukaran, mengenai perkembangan kondisi pasar modal global dan pasar modal Indonesia yang berada di bawah tekanan, antara lain dipengaruhi oleh penentuan virus korona (COVID-19) sebagai pandemi global oleh WHO. Dengan negara yang mayoritas masyarakatnya beragama Islam menjadikan indikator atau instrumen saham syariah di BEI menjadi hal yang menarik untuk dikaji dengan teliti. Penelitian ini bertujuan untuk menguji bagaimana wabah COVID-19 telah mempengaruhi perusahaan yang terdaftar di Jakarta Islamic Index (JII). Periode studi diklasifikasikan ke dalam periode sebelum dan setelah pengumuman. Data terdiri dari 30 observasi harga harian dari 30 perusahaan terpilih. Periode penelitian berkisar dari 4 Maret 2020 hingga 17 April 2020. Pengujian dilakukan dengan menggunakan uji beda Paired Sample t-test dengan software SPSS 26. Hasil dari penelitian menunjukkan bahwa ada perbedaan return yang signifikan antara sebelum dan setelah pengumuman surat keputusan dewan direksi Bursa Efek Indonesia mengenai perubahan waktu perdagangan tentang transaksi pertukaran, mengenai perkembangan kondisi pasar modal global dan pasar modal Indonesia yang berada di bawah tekanan, antara lain dipengaruhi oleh penentuan virus korona (COVID-19) sebagai pandemi global oleh WHO pada Jakarta Islamic Index (JII).

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Momentum Trading, Contrarian Trading and Smart Money Manipulation

Cited by 8 publications

References 15 publications

Mastery of “Monthly Effects”: Big Data Insights into Contrarian Strategies for DJI 30 and NDX 100 Stocks over a Two-Decade Period

Mastery of “Monthly Effects”: Big Data Insights into Contrarian Strategies for DJI 30 and NDX 100 Stocks over a Two-Decade Period

Can investors profit by utilizing technical trading strategies? Evidence from the Korean and Chinese stock markets

Covid-19: Efek Pada Saham Yang Terdaftar Di Jakarta Islamic Index (Jii)

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