2006 Student Research Conference:
19th Annual Student Research Conference

Business & Accountancy

Phenomenal Performance of Stock Trading Software: Propaganda or Reality
Anna L. Halim
Dr. Jason Lin, Faculty Mentor

Some experts and media claimed that stock trading software help inexperienced investors gain substantial wealth. Recently, Business Wire publicized this phenomenon in the article titled Investing Systems Inc: Trading Software Helps Traders Prosper During Market Downturns. To test this claim, one of the popular stock trading software, StockSignalPro2.4, was acquired to construct two portfolios: actively-traded and long-term holding. Returns from these portfolios are compared with two other portfolios with the same holding periods containing random-selected stocks. Statistical analyses were run to test the hypothesis that the software-suggested stocks would yield higher returns than the random-selected ones. The software’s actively-traded portfolio performed better than the random-selected. The statistical analysis showed that the difference between the returns was significant. Conversely, between the two long-term holding portfolios, the random-selected stocks yielded a higher overall return after being held for 182 days. However, statistical analysis did not prove that the difference was significant.

Keywords: finance, stocks, trading software, portfolios

Topic(s):Business Administration

Presentation Type: Oral Paper

Session: 15-3
Location: VH 1010
Time: 10:15

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