Trading Strategies Based On Charts Of Coincidence

Kahneman (1973) proposed the theory of limited attention. The attention of the individual thing is bound to reduce the attention of another piece of things. In recent years, more and more financial experts study in this area. And ranking list is a low-cost resources, which would be easy to attract individual’s attention. Now, the major journals, economic blocks on the network updated hot stocks or chart every day. The recommended hot stocks can easily enter the field of view of the investors and attract their attention. Thus lead to the ranking list effect. Ranking list effect is the result of many investors’ joint action. This is because investors tend to buy stocks that cause them concern.Based on limited attention and ranking of investment research found that when rise rankings published list of the top ten stock than outside the top ten stock investors get more attention. And by January1,2005to December31,2012, the relevant data studies have found that there is such a billboard effect. Finally, the thesis will list larger than2stock ownership in the same stocks plate this event as a coincidence factor, at the same time it also by investors using as an investment strategy to win the market.The research of this paper results is:under the condition of limited attention, ranking will attract investors’attention, the billboard effect. When selected at the same time the coincidence factor of K=4, sharpe ratio, volatility is low, the investment yield, win the market portfolio is optimal. Also found in a bear market, investors will be bulk, ranking coincidence effect to win the market, but in a bull market, people’s investment is relatively dispersed, coincidence investment strategy will lose to the market.