V.9:4 (135-138): Using Neural Nets In Market Analysis by Mark B. Fishman, Dean S. Barr and Walter J. Loick

V.9:4 (135-138): Using Neural Nets In Market Analysis by Mark B. Fishman, Dean S. Barr and Walter J. Loick
Item# \V09\C04\USINGNE.PDF
Availability: In Stock

Product Description

Can neural networks aid traders? By Mark B. Fishman, Dean S. Barr and Walter J. Loick

Neural networks are the newest form of artificial intelligence technology to make its way into market analysis. Neural networks, also referred to as neural nets, mimic the human brain's most powerful ability, that of pattern recognition. The neural net can make a decision or a prediction by drawing on an inventory of patterns previously learned, seeking the one most relevant to the current situation. What distinguishes neural nets, moreover, from "classical" AI paradigms such as that of rule-based systems is that, in a real sense, t they "learn" by example and modify themselves, rather than having to be programmed with specific preconceived rules.

Neural nets use layers of real or "simulated" electronic neurons with various numeric weights (dynamically modifiable in the "training" phase) representing the connection strengths between them to "learn" a predictive ability. A neural net, once trained, can be described as a matrix of neurons and connection strengths that represent the "solution" to a problem. Commercially available neural net shells, as well as those still being researched, use a variety of algorithms to adjust the connection strengths between the neurons until convergence is achieved and the system is able to make correct predictions with some, usually high, percentage of accuracy. Once the network successfully sets the weights of the connections to produce the correct output, then the trained net is ready to use as a predictive or diagnostic tool.


While this technology may seem fancifully futuristic, some very good and effective neural network software programs are in fact already available to the public at a reasonable cost. We use Brainmaker, created by California Scientific Software. A neural net software package such as Brainmaker should be thought of as a "shell" program, similar to an expert system shell, the effectiveness of which is largely dependent on the choice of algorithms by which it "learns." What makes this software package a powerful tool for learning relationships is the proprietary back-propagation algorithm used by its designers.

*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.

Take Control of Your Trading.
Professional Traders' Starter Kit
All these items shown below only $299.99!
  • 5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.)
  • 5 year access to S&C Archive
  • 5 year access to S&C Digital Edition
  • 5-year subscription to Traders.com Advantage.
  • 5-year subscription to Working Money.
  • Free book selection.
  • Click Here to Order