Abstract
Decision support system using decision tree classification can be used for stock trading technical analysis. Technical analysis is a stock analysis method which solely based on interpreting stock's price chart movement or trend. Historical stock prices and volume are used as variable input. The system is built based on financial market technical analysis indicators (Exponential Moving Average, Moving Average Convergence Divergence, Relative Strength Index, Money Flow Index, and parabolic Stop and Reverse). The proposed method is arrange indicators set into decision tree based on stock trading rules and it create buy, hold, and sell classes which represented decisions in trading. Decision classes then are analyzed for their profitability, geometric mean return, and cumulative wealth index. Furthermore sensitivity analysis is added into profitability analysis to obtain more positive value trading in decision making. The research purpose is to enhance decision making in technical stock trading. Compared to the single indicator decision tree multiple indicators offers 20% enhancement in decision making.
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