Project Number: DZT-0701 STOCK MARKET SIMULATION An ...

Project Number: DZT-0701

STOCK MARKET SIMULATION

An Interactive Qualifying Project Report

Submitted to the faculty

of the

WORCESTER POLYTECHNIC INSTITUTE

In partial fulfillment of the requirements for the

Degree of Bachelor of Science

by

___________________ __________________ _________________

Haiying Liu

Xiangyu Wang

Chaoran Xie

Date: 15 December 2007

Approved:

______________________________ Professor Dalin Tang, IQP Advisor

Abstract

The goal of this project was to achieve a basic understanding of the stock market through research and trading simulation. By using proper investment and technical analysis strategies in addition to online simulation tools, investment theories were put into practice. During the simulation, stock trades were made based on different strategies. Results from several trading strategies were compared and contrasted according on their profitability. Effectiveness of each strategy was also discussed.

Acknowledgement

We would like to thank Professor Dalin Tang of Worcester Polytechnic Institute for his guidance to this project. His time, effort, and constant contributions lead to our accomplishing such a comprehensive and challenging project. Also we would like to thanks to our friend Ting Ting for her technical help.

Table of Contents

Abstract............................................................................................. I Acknowledgement................................................................................ II Table of Contents................................................................................. III Chapter 1: Introduction........................................................................ 1

1.1 Objectives................................................................................................... 1 1.2 Stock Market in General........................................................................ 1 1.3 History of Stock Market...................................................................... 2 1.4 Major Stock Indices in the USA....................................................... 5 1.5 Overall Plan of IQP.................................................................. 6 Chapter 2: Other Types of Investment....................................................... 8 2.1 Cash................................................................................... 8 2.2 Bond................................................................................... 9 2.3 Mutual Funds........................................................................ 11 2.4 Real Estates...................................................................................... 12 Chapter 3: Investment Strategies..................................................................... 13 3.1 Introduction to Investment Strategies............................................ 13 3.2 Descriptions of Common Strategies............................................. 15 Chapter 4: Fundamental Analysis VS. Technical Analysis............................. 22 4.1 Introduction to Fundamental Analysis........................................... 22 4.2 Problems with Fundamental Analysis........................................... 23 4.3 Fundamental Analysis Tools and Tactics........................................ 25 4.4 Introduction to Technical Analysis............................................... 26

4.5 Problems with Technical Analysis............................................... 29 4.6 Technical Analysis Tools and Tactics........................................... 29 Chapter 5: Portfolio One by Haiying Liu.................................................. 31 5.1 Types of Companies to Invest..................................................... 31 5.2 Backgrounds of Selected Companies............................................ 32 5.3 Weekly Reports of Actual Trading............................................... 39 5.4 Summary..................................................................................... 47 Chapter 6: Portfolio Two by Xiangyu Wang.................................................... 52 6.1 Types of Companies to Invest.................................................... 52 6.2 Backgrounds of Selected Companies................................................... 53 6.3 Weekly Reports of Actual Trading............................................... 59 6.4 Summary............................................................................. 66 Chapter 7: Portfolio Three by Chaoran Xie............................................... 68 7.1 Types of Companies to Invest........................................................... 68 7.2 Backgrounds of Selected Companies............................................ 69 7.3 Weekly Reports of Actual Trading............................................... 76 7.4 Summary................................................................................... 86 Chapter 8: Effectiveness of Each Strategy................................................. 88 Chapter 9: Conclusion................................................................................................ 93 Reference.......................................................................................... 95

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download