A fuzzy logic momentum analysis system for financial brokerage

The modelling of financial systems continues to hold great interest for not only researchers but also investors and policymakers. Many of the characteristics of these systems, however, cannot be adequately captured by traditional financial modelling approaches. Financial systems are complex, nonlinear, dynamically changing systems in which it is often difficult to identify interdependent variables and their values. Financial brokerage is concerned with executing orders of buying and selling of certain amounts of shares at the best possible price. Many mathematical and algorithmic systems have been developed for this task, however they cannot seem to overcome a standard volume based system. This paper proposes a new framework for high frequency trading using an intelligent fuzzy logic based momentum analysis system. The system was applied to brokerage of financial stocks, and tested against the standard volume based brokerage system. The Fuzzy Logic Momentum Analysis System has proven to outperform the traditional and standard systems that are used in the industry.