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Article

Candlestick—The Main Mistake of Economy Research in High Frequency Markets

Department of Investment and Real Estate, Poznan University of Economics and Business, al. Niepodleglosci 10, 61-875 Poznan, Poland
Int. J. Financial Stud. 2020, 8(4), 59; https://doi.org/10.3390/ijfs8040059
Received: 4 August 2020 / Revised: 23 September 2020 / Accepted: 1 October 2020 / Published: 10 October 2020
(This article belongs to the Special Issue Alternative Models and Methods in Financial Economics)
One of the key problems of researching the high-frequency financial markets is the proper data format. Application of the candlestick representation (or its derivatives such as daily prices, etc.), which is vastly used in economic research, can lead to faulty research results. Yet, this fact is consistently ignored in most economic studies. The following article gives examples of possible consequences of using candlestick representation in modelling and statistical analysis of the financial markets. Emphasis should be placed on the problem of research results being detached from the investing practice, which makes most of the results inapplicable from the investor’s point of view. The article also presents the concept of a binary-temporal representation, which is an alternative to the candlestick representation. Using binary-temporal representation allows for more precise and credible research and for the results to be applied in investment practice. View Full-Text
Keywords: high frequency econometric; technical analysis; investment decision support; candlestick representation; binary-temporal representation high frequency econometric; technical analysis; investment decision support; candlestick representation; binary-temporal representation
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MDPI and ACS Style

Stasiak, M.D. Candlestick—The Main Mistake of Economy Research in High Frequency Markets. Int. J. Financial Stud. 2020, 8, 59. https://doi.org/10.3390/ijfs8040059

AMA Style

Stasiak MD. Candlestick—The Main Mistake of Economy Research in High Frequency Markets. International Journal of Financial Studies. 2020; 8(4):59. https://doi.org/10.3390/ijfs8040059

Chicago/Turabian Style

Stasiak, Michał D. 2020. "Candlestick—The Main Mistake of Economy Research in High Frequency Markets" International Journal of Financial Studies 8, no. 4: 59. https://doi.org/10.3390/ijfs8040059

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