Behavioral Biases and the Application of Technical Analysis in Stock Market Decision Making
DOI:
https://doi.org/10.63468/sshrr.351Keywords:
Technical Analysis, Disposition Effect, Mental AccountingAbstract
This study investigates the relationship between behavioral biases and the use of technical analysis in investment decision making. Behavioral finance literature suggests that investors are not always rational and frequently rely on psychological shortcuts when evaluating financial markets. The research examines biases such as mental accounting, disposition effect, narrow framing, and availability bias and evaluates how these factors influence investors when interpreting technical indicators. A structured questionnaire approach is used to collect data from individual investors involved in stock market trading activities. The results demonstrate that behavioral biases significantly shape how investors interpret price patterns, trading signals, and market information. Understanding these biases can help investors and financial professionals improve decision-making processes and reduce irrational investment behavior.
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Copyright (c) 2026 Dr. Kaleem Ullah, Dr. Manzoom Akhter, Mir Saad Hussain
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