Using Neural Networks To Forecast Stock Markets

7649 words, 31 pages

Intro Sample...


2 Motivation
There are several motivations for trying to predict stock market prices. The most basic of these is financial
gain. Any system that can consistently pick winners and losers in the dynamic market place would make the
owner of the system very wealthy. Thus, many individuals including researchers, investment professionals,
and average investors are continually looking for this superior system which will yield them high returns.
There is a second motivation in the research and financial communities. It has been proposed in the
Efficient Market Hypothesis (EMH) that markets are efficient in that opportunities for profit are discovered
so quickly that they cease to be opportunities. The EMH effectively states that no system can continually
beat the market because if this system becomes public, everyone will use it, thus negating its potential
gain. There has been an ongoing debate about the validity of the EMH, and some researchers attempted
to use neural networks to validate their claims. There has been no consensus on the EMH’s validity, but
many market observers tend to believe in its weaker forms, and thus are often unwilling to share proprietary
investment systems.
Neural networks are used to predict stock market prices because they are able to learn nonlinear mappings
between inputs and outputs. Contrary to the EMH, several researchers claim the stock market and other
complex systems exhibit chaos. Chaos is a nonlinear deterministic process which only appears random
because it can not be easily expressed. With the neural networks’ ability to learn nonlinear, chaotic systems,
it may be possible to outperform traditional analysis and other computer-based methods.
In addition to stock market prediction, neural networks have been trained to perform a variety of financial
related tasks. There are experimental and commercial systems used for track View More »

Read More

Related Essays on Using Neural Networks to Forecast Stock Markets

  • The Wisdom Paradox

    4087 words, 17 pages

    “The Wisdom Paradox” (Goldberg, 2005) is a fascinating book about the biology of cognitive wisdom, including its unique costs and benefits. This book provides a thorough explanation of how people in later stages of life successfully undertake major cognitive tasks, as well as how this aptitude can be maximized. With vigorous and life-long mental activity in novel tasks learning new information, an aging person can gain wisdom and minimize clinical brain injury. Wisdom has intellectual, practical, moral, and spiritual facets. It can be defined as extensive pattern recognition of new informati

    View Document »

    Electronic Voting

    1024 words, 5 pages

    Project – an Automated Make-up color selection system. Supervisor – Dr. H.L.Premarathne Field(s) of concern – Artificial Neural Networks, Fuzzy Logic, Image Processing, Data Classification, make-up Background: Women typically like to be in the centre of attraction of other the people. In order to be elegant looking and to get the attention of others, ladies often use make-up. Make-up is a favorite topic of women, and is a primary concern, not only when attending functions such as weddings, parties, but in day-to-day life when going for work too. The success of make-up relies on how w

    View Document »

    Continental Carriers

    3228 words, 13 pages

    I. Case Context Continental Carriers, Inc., (CCI) is known as a regular commodities motor carrier. Since its inception, it has experienced continuous growth in revenues and mastered the strategic reduction of operating costs. It soon became known in the trucking industry as a widely profitable key player. In order to sustain continuous growth in revenues and income, management has decided that key acquisitions need to be made. The top contender, Midland Freight, Inc., a common carrier company would expand CCI’s route system. The prospect company also demonstrated con

    View Document »

    Advanced Contrast Between Gprs And Cdma Data One Packet

    3081 words, 13 pages

    Advanced Contrast between GPRS and CDMA One Packet Data Puneet Kumar and Arvind.S S.R.M Engineering College, Chennai, Tamil Nadu Abstract:- Proliferated needs of the growing market regarding better data packet and voice services is looking to be met by deploying packet data services. This feature involves a complete upgrade of the network. The path to achieve this greatly differs between GSM and CDMA networks. This paper gives an advanced comparison between the GSM and CDMA networks in the path to deploying packet data with essential

    View Document »

    Balle Balle

    11348 words, 46 pages

    chak de phattey The Call for Participation for Wikimania 2009 has been released. Submit your presentations before April 15. [Hide] [Help us with translations!] Enron scandal From Wikipedia, the free encyclopedia Jump to: navigation, search Enron Corporation Type Defunct / Asset-less Shell Founded Omaha, Nebraska, 1985 Headquarters Houston, Texas, United States Key people Kenneth Lay, Founder, former Chairman and CEO Jeffrey Skilling, former President, CEO and COO Andrew Fastow, former CFO Rebecca Mark-Jusbasche, former Vice Chairman, Chairman and CEO of Enron Internatio

    View Document »

    Special Economic Zones In India

    21349 words, 86 pages

    Introduction to Economic Zones “Export else perish “ these are the words of first Prime Minister of India Pt. Jawaharlal Nehru. India being a continent like country having 30 states, more than 1000 languages and world second largest man power having diversified natural conditions right from Rain Forests of Kerala, Ice Mountains of Himalaya, Runn of Kuch to productive land of Bramahaputra has great potentials of world class export worthy products from various industries like Agriculture, Engineering, Chemicals, Software’s, Gems and Jewellry, Pharmaceuticals, Bio technology and many more.

    View Document »

    Italy Country Briefing

    4432 words, 18 pages

    ITALY COUNTRY BRIEFING updated at May 2009 Forecast May 26th 2009 From the Economist Intelligence Unit Source: Country Forecast | | | | Outlook for 2009-10 • Italy's right-of-centre coalition government, led by Silvio Berlusconi, faces a major challenge to limit the impact of the global crisis on Italy's rapidly deteriorating economy and keep its fragile public finances under control. • Government cohesion will be hindered by divisions in the ruling coalition, but the Economist

    View Document »

    Coca Cola Marketing Mix

    9843 words, 40 pages

    Introduction The company under investigation in this study is Tim Hortons, a coffee and fresh-baked goods quick-service restaurant, originating from Canada. As of January 2006, (Annual Report 2005, P.1) Tim Hortons operated 2,597, mostly franchised, stores in Canada and 288 in the US. Tim Hortons boasts a 76% market share in the Canadian coffee and fresh-baked goods sector (Shareholder’s Report 2005, P.6) and “based on sales dollars, Tim Hortons is now almost 25% larger than its closest QSR (quick-service restaurant) competitor in Canada.” (Ibid) Since 1995, Tim Hortons has been owned by th

    View Document »

    Fatface - The Analysis Of The Company

    5797 words, 24 pages

    1. Task We had four countries to compare and ultimately decide which one should be the preferred European country where Fat Face should expand to. The management team at Fat face have managed to narrow it down to Croatia, Italy, Romania and Sweden. Using Macro environmental factor we aim to narrow it down further into two countries. Finally using macro, micro and other factors we seek the most suitable option. In order for our team of consultants to determine which country to select an evaluation of the candidate countries has to be executed, which should in turn provide insight into trade

    View Document »

    Manager

    4427 words, 18 pages

    | |By: Himadri Mandal | | |MBA (IB) 2007-10. Roll-14 | | |IIFT-Kolkata. | | |Under : Dr. Krishnamachari Rangarajan, Professor of Strategic Management Indian Institute of Foreign Trade

    View Document »

More Popular Essays

Research help is just moments away!