  In Part III of this study, we apply the price dynamical model with big buyers
and big sellers developed in Part I of this paper to the daily closing prices
of the top 20 banking and real estate stocks listed in the Hong Kong Stock
Exchange. The basic idea is to estimate the strength parameters of the big
buyers and the big sellers in the model and make buy/sell decisions based on
these parameter estimates. We propose two trading strategies: (i)
Follow-the-Big-Buyer which buys when big buyer begins to appear and there is no
sign of big sellers, holds the stock as long as the big buyer is still there,
and sells the stock once the big buyer disappears; and (ii) Ride-the-Mood which
buys as soon as the big buyer strength begins to surpass the big seller
strength, and sells the stock once the opposite happens. Based on the testing
over 245 two-year intervals uniformly distributed across the seven years from
03-July-2007 to 02-July-2014 which includes a variety of scenarios, the net
profits would increase 67% or 120% on average if an investor switched from the
benchmark Buy-and-Hold strategy to the Follow-the-Big-Buyer or Ride-the-Mood
strategies during this period, respectively.
