Analyzing Market Trends Using a Visual Approach

Abstract: This research discusses various technical analysis methods and their flaws of the stock market price trend, and proposes a plan that integrates several technical indicators to analyze the price trend. Changes in price trends are mainly due to market uncertainty about the future. The macro investment sentiment is crucial to the impact of price trends. Any political and financial decision-making changes or events can affect the market's investment sentiment. Changes in securities market prices usually have a direct response to changes in the macro investment environment. A single technical indicator captures this change. But when multiple technical indicators are used, there is the potential for conflicting signals. Investors can judge future trends based on their familiarity with the market or past experience. For resolving the conflict of technical indicator signals and managing future uncertainty, this study uses information entropy theory as an algorithm for integrating technical indicators, and then forms an easy-to-read price trend chart. The K-line chart with various color changes provides a visual price trend judgment to facilitate investors to make decisions. This study verifies the practicability of this method with past historical data.