Study On Using Volume Technical Analysis Efficiency Of Stock Index Futures

Technical Analysis indexes are applied extensively in stock and future market, they have been frequently utilized as tools to foresee the trend of stock prices,but they are made of past price and volume of stock market,so it is backward index. Although technical analysis can foresee the stock trends,because of every index has different susceptibility and parameter setting,so have different results to predict stock price trends.Volume traded on behalf of investors in a given price would buy volume, but also represents the investor's willing to trade as well as the power of price rising and falling,also represents the support and resistance level of stock price,so the variation between volume and price is always the key when one estimates the trend of stock market.Appling theoretic research of behavioral finance to the volume research,volume can be seen as a positive feedback traders chasing the price of the will of the.When the formation of a trend,if so,many traders have entered the market to chase the price,the volume will increase,but the trend in the chase after a certain period,investors over-reaction will eventually resume a rational,when rational investors began to be closed out,the volume fall,when prices began to reverse and tend to the fundamental value direction of convergence,so considering accession to the volume of trading strategies can increase their profit opportunity.Therefore can use the relationship between price and volume to study whether the change of volume can affect technical analysis to reduce the number of unnecessary transaction and increase profit.In order to test the above reasoning,this article use of the Taiwan stock index futures markets from 2000 to 2007 transaction data,through the strategic transaction in the design,the experiment will be divided into group 1 and group 2, setting increase or decrease in volume as a variable.The results proved that in order to increase or decrease in volume traded with technical indicators to guide the operation of group 2,the operating performance better than a single with technical indicators to guide the operation of group 1.Not only reduce the number of times of the transaction, with the average profit rate is also a corresponding increase.Although the test results vary,but further analysis found that,Compared with the previous,the latter of the test was significantly better than pre.So there is still sufficient reason to believe that using volume technical analysis can help investor better return on investment.Therefore,the volume changes can to promote technical indicators the forecast results for index futures price movement trends.