Abstract
The Investment in the Stock Exchange is a fundamental aspect in modern economics, especially the investment in the shares of companies, it became attracting a lot of Investors and speculators with different objectives according to possibilities and nature each one of them, but these participants in the Stock Exchange hesitate about find the better Investment opportunity for them. They have Fears of bad decision Investment that don’t give a high return with the lowest risk. This makes the Investors and speculators need to use an Indicator that helps them in making a rational speculation decision, And one of best indicators is Relative Strength Index RSI which Can determination the appropriate timing for speculating in the shares of companies depending on the historical data of prices stock. Given that the speculators in the Iraqi stock market are afraid to enter into speculation because of lack of finding the best tools that guide their decisions, and for this reason, this subject has been chosen. This study is aimed to know the role of using the Relative Strength Index in making the best decision to speculate on shares listed in the Iraqi Stock Exchange and on this basis this problem the research has the main question: ((How can RSI be used to make an optimal decision to speculate on stocks?). It concluded in this study that the use of Relative Strength Index had a fundamental and effective role in rationalizing the speculation decisions in the shares of the Bank of Baghdad which listed in the Iraq Stock Exchange, Where assist on determination of the right timing for investment through forecasting shares prices upwards and downwards, The Speculator Purchase at forecasting the price will upward and selling at forecasting the price will downward.
Highlights
The first tool needed for developing the economy of any country is the provision of funds which required by the companies in order to expand its activities. the companies are looking for different sources of funding to fulfill their financial needs, and because the traditional sources of funding like investment in bonds are costly sources which required paying interests, it generates a fixed returns, for that, the owners of companies and the investors need for investing tools to help them to reduce the interests paid to lenders, and at the same time generates growing income for them like investment in stocks.Since the stock Exchange is including a high level of risk
Using the Relative Strength Index (RSI) helped the speculators in the stocks of the bank of Baghdad in Iraq Stock Exchange in making buying and selling decisions by giving a proactive indicative
The Relative Strength Index (RSI) helps the speculators In the stocks of the bank of Baghdad in the Iraq Stock Exchange in proactive predicting of price trends and what prices will be in the future
Summary
The first tool needed for developing the economy of any country is the provision of funds which required by the companies in order to expand its activities. the companies are looking for different sources of funding to fulfill their financial needs, and because the traditional sources of funding like investment in bonds are costly sources which required paying interests, it generates a fixed returns, for that, the owners of companies and the investors need for investing tools to help them to reduce the interests paid to lenders, and at the same time generates growing income for them like investment in stocks.Since the stock Exchange is including a high level of risk. The speculators became looking for the best tools which enable them to reduce the risks of investing in they the stocks of companies. This can be done by observing the prices movements for a particular share and show it in charts “this is what called as the technical analysis” use this data to predict for the future price of stocks by using technical indicators. The Relative Strength Index (RSI) is one of the most used indicators in technical analysis, it is an instrument helps the users of technical analysis in understanding and reading technical charts, and predicts the future trends of prices in the financial Exchanges and measure the range of price movements.
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