Understanding the Investors’ Investment Decisions through Some Data Mining Tools- A Study in Dhaka Stock Exchange (DSE)

Abstract

Purpose: Decision making is the process of choosing a particular alternative from a number of alternatives. Decision making is very much important in investment in the stock market. As it is enormously sensitive, a wrong decision may put the investor back to the street. Modern scientific data mining tools can play important role in making investment decision in the stock market. The purpose of the study is to find out the effectiveness of investors’ decision in buying and selling stock and the efficiency of some data mining tools in aiding investor’s decision.
Methodology: This paper used several data mining techniques such as beta, Chaikin money flow indicator (CMI) and Bollinger band to analyze investors’ decision in buying and selling stocks. Data for the study were taken both from primary and secondary sources specially, from website of Dhaka Stock Exchange.
Findings: The result shows that in most cases majority of investors failed to take right decision in right time in terms of the estimation derived from data mining tools used in the study. It was also found that Bollinger band was found to be more efficient than CMI in making prediction.