A Quantum Finance Model for Technical Analysis in the Stock Market

Abstract

This paper, is a contribution to quantum finance theory. The time-dependent Schrodinger wave equation for the harmonic oscillator was used to model the movement of stocks in a daily price-limited stock market. Using the Nigeria Stock Exchange(NSE) as a case study, the “price wave” function was developed. From this, given any quoted stock, the rate of return and the investment risk measure (standard deviation) of the corresponding stock can be computed in a continuous manner. This is an improvement over earlier computational method such as arithmetic and logarithmic rate of return which are discrete and do not provide means for the computation of standard deviation indicator.