Digital Methods of Technical Analysis for Diagnosis of Crisis Phenomena in the Financial Market

Abstract

Periodically occurring crisis phenomena in financial markets make urgent the issues related to prompt diagnostics and forecasting of crisis phenomena development to minimize financial risks. Modern technical analysis, based on the extensive use of digital methods, is one of the main approaches to the prompt processing of stock exchange real-time information. However, the current instability of the economy requires the improvement of existing technical methods. This study aims to develop the tools for technical analysis of financial assets to improve investment strategies in crisis periods. In this direction, using the methods of mathematical statistics, indicators of volatility and depth of economic crisis were developed to optimize portfolio investment management strategies. The offered technical analysis tools have been tested by the example of the financial crises in 2008-2009, 2014-2015, 2019-2020 concerning the Russian stock market. The authors presented the investment strategy results based on the developed approach. The results obtained demonstrate the positive economic efficiency of the suggested recommendations. The application of the developed algorithm based on technical analysis allows for monitoring the financial market situation. It reveals critical points of crisis phenomena (for example, periods of maximum volatility, the 'bottom' of the crisis, etc.). The algorithm is used for analysis of information transmitted by a trading platform.