Nigerian Stock Market Investment using a Fuzzy Strategy

Abstract

The Nigerian Capital Market though an emerging market, has in recent times been adjudged to be one of the most resilient in the world even in the heat of the global economic meltdown. It offers high returns on investment as compensation for its high risk. In this research, we have investigated the predictive capability of the fuzzy inference system (FIS) on stocks listed on the Nigerian Stock Exchange, within a two-month window. For each selected stock, the technical indicator-based fuzzy expert system developed in Matlab 7.0 provides the buy, sell or hold decision for each trading day. A web-based user interface enables the investor to access the trade forecast for each day. Using the Netbeans IDE, we implemented the user interface with Sun Java. Our results show that the FIS can reliably serve as a decision support workbench for intelligent investments.

Keywords: fuzzy logic, stock market, Forecasting, Decision making, technical indicator