Association Between Behavioral Biases and Technical Analysis

Abstract

This study explores the topic of behavioral biases. and their intricate relationship with technical analysis in stock market investment decisions. Focusing on biases like mental accounting, disposition effect, narrow framing, and availability bias, the study aims to uncover their impact on the utilization of technical analysis. Employing a correlation-based research design, data is gathered from stock investors in Pakistan's twin cities. Utilizing Likert-scale questionnaires and Structural Equation Modeling (SEM), the learning explores the interplay between these biases and technical analysis techniques. Through this investigation, the study contributes to a deeper comprehension of how cognitive biases influence investment determination and the incorporation of technical analysis in stock market strategies.

Keywords: Technical Analysis, Disposition Effect, Mental Accounting, Availability Bias.