SISTEMA DE TOMADA DE DECISÃO OBJETIVA PARA A IDENTIFICAÇÃO DE CICLOS DO MERCADO FINANCEIRO

How can one identify trading market cycles? Patience, when combined with technical analysis, offers valuable insights into market cycles, providing investors with an effective framework for decision- making. Understanding the current phase of a market cycle is essential for identifying optimal opportunities to enter or exit a specific asset. While it is nearly impossible to perfectly predict market bottoms or peaks, it is feasible to identify regions that approximate these critical points. The development and implementation of systems that leverage strategies based on technical indicators to track market trends and automatically determine entry and exit points offer a promising alternative to passive management or decisions influenced by emotions and market news. This paper proposes an objective decision-making system designed to eliminate emotional bias and reliance on external market information. The proposed system utilizes the stochastic oscillator indicator, with its performance evaluated on stocks listed on the São Paulo Stock Exchange (Bovespa). The findings demonstrate the method’s effectiveness when compared to benchmark indicators, such as the Interbank Deposit Certificate (CDI) and the traditional “buy-and-hold” strategy. This study contributes to the ongoing discourse on the efficacy of automated trading systems designed to identify and capitalize on market cycle trends in financial markets.