Two-Stage Stock Investment Strategy Based On MACD And Prospect Theory

China's stock market has spent a full 30 years since it was founded in 1989.But there are still many problems in China's stock market compared to foreign mature stock markets.The volatility of the domestic stock market is huge.The relevant market mechanism is not sound.Supervision is not in place so that there are a lot of chaos in the market.Meanwhile,the quality of investors is uneven due to the low entry barriers.As a result,investors in China's stock market tend to have dismal earnings.Only 10% of them could gain the profit while 70% of them lost and 20% of them broke even.Some of the investment strategies that have been proven to be effective abroad are always out of place in the Chinese stock market and are still unable to stabilize the gains from China's stock markets.At present,domestic investors tend to use stock analysis indicators such as MACD to conduct stock investment,but MACD only predicts the future trend from the stock price level,which will produce higher errors.Therefore,this paper combines MACD and prospect theory to propose a two-stage investment strategy for the Chinese stock market.The strategy is mainly to perform band operations on stocks selected through fundamental analysis methods.First,at the first stage,the MACD is analyzed to find the decision point of the investment.In the second stage,the decision point is calculated by the foreground theory to obtain the relevant foreground value,so as to analyze the possible behavior of the investor,and judge the future trend of the stock price.This combines stock prices with the behavior of investors,making predictions of future stock prices more effective.In order to make the strategy more effective,this paper uses the real and simulated disk to verify the effectiveness of the strategy.Firstly,the two-stage investment strategy proposed in this paper is used to operate the stocks selected by the fundamental analysis method.Then,the market value of the stock accounts is continuously tracked on a daily basis,and 2929 data are collected in a statistical cycle of 2 years.Finally,The statistics of the acquired investment data are analyzed and analyzed to verify the effectiveness of the strategy.The empirical results show that the strategy of this paper is generally effective.