An Overview of Event Based Directional Change for Algorithmic Trading

Abstract

This paper outlines a framework of a practicable scheme to facilitate algorithm trading of securities. The proposed scheme is capable to intelligently identify, analyze, and implement the intrinsic directional changes in the price movement of the stock market. An overall qualitative assessment is provided together with survey of existing theoretical and empirical foundations towards the success of such an algorithm. Potential loopholes and roadmap for further improvement are suggested.