In the recent times, the stock markets have emerged as one of the top investment destinations for individual and retail investors due to the lure of huge profits that are possible with stock investments compared to more traditional and conservative forms of investments such as bank deposits, real estate and gold. The stock markets unlike other forms of investment are highly dynamic due to the various variables involved in stock price determination and are complex to understand for a common investor. Individual and small-time investors have to generate a portfolio of common stocks to reduce the overall risk and generate reasonable returns on their investment. This phenomenon has given way too many individual and retail investors incurring huge losses because their decisions are based on speculation and not on sound technical grounds. While there are financial advisory firms and online tools where individual investors can get professional stock investment advice, the reliability of such investment advice in the recent past has been inconsistent and not meeting the rigor of quantitative and rational stock selection process. Many of such stock analysts and the statistically sound machine learning for algorithmic trading of financial instruments tools mostly rely on short term technical indicators and are biased by the speculation in the market leading to huge variances in their predictions and leading to huge losses for individual investors.
Index Terms
This article provides an in-depth overview of our methodology, data collection process, model implementations, evaluation metrics, and potential applications of our research findings. The research indicates that NBeats and https://forexarena.net/ NHits models exhibit superior performance in financial forecasting tasks, especially with limited data, while Transformers require more data to reach full potential. Enter your mobile number or email address below and we’ll send you a link to download the free Kindle App. Then you can start reading Kindle books on your smartphone, tablet, or computer – no Kindle device required.
Computational Models of Algorithmic Trading in Financial Markets
The design and development of the Financial DSS is based on the philosophy to combine various independent models and not rely on a single stock price model to increase the accuracy and reliability of the stock selections and increase the overall Return on Investment (ROI) of the stock portfolio. The AI/ML stock models are independently trained using historical financial data and integrated with the overall Financial DSS. Finally, the Financial DSS tool with a graphical user interface is built integrating all the three models which shall be able to run on a general-purpose desktop or laptop.
Download Statistically Sound Machine Learning For Algorithmic Trading Of Financial Instruments
Because of the various financial and economic crises in the industry, today, every person smells it risky to put the money in any ongoing business. To cope with that, this work proposes an alternative to model the distributed Stock Exchange Scenario with ontologies and their futuristic predictions. The proposed model considers that each investor can invest using information obtained by communication with different traders or investors. Each investor has its knowledge represented by ontologies, which is composed of technical knowledge together with internal training states of the data to present the graph. Our preliminary results show the possibility to use ontologies as knowledge representation mechanisms for domains that consider the human emotional dimension for decision-making processes. The successful prediction of the stock market will have a very positive impact on the stock market institutions and the investors also.
Saved searches
- The successful prediction of the stock market will have a very positive impact on the stock market institutions and the investors also.
- Because of the various financial and economic crises in the industry, today, every person smells it risky to put the money in any ongoing business.
- Finally, the Financial DSS tool with a graphical user interface is built integrating all the three models which shall be able to run on a general-purpose desktop or laptop.
- Then you can start reading Kindle books on your smartphone, tablet, or computer – no Kindle device required.
To reliably validate the Financial DSS, it has been subjected to wide variety of stocks in terms of market capitalization and industry segments. The Financial DSS is validated for its short term and long-term Return on Investment (ROI) using both historical and current real-time financial data. The researcher has reported that the accuracy of the AI/ML stock price models is greater than 90% and the overall ROI of the stock portfolios created by the Financial DSS is 61% for long term investments and 11.74% for short term investments. This system has the potential to help millions of individual investors who can make their financial decisions on stocks using this system for a fraction of cost paid to corporate financial consultants and value eventually may contribute to a more efficient financial system. Today it is globally known that there is no point in investing your money into a new venture or a start-up business. It is being observed that in Today’s time, the market has turned out to be financially volatile due to aggressive competition between the vendors for the same products in the market.
While the use of Artificial Intelligence (AI) and Machine Learning (ML) techniques is widely adopted in the financial domain, integration of AI/ML techniques with fundamental variables and long-term value investing is a lacking in this domain. Some of the stock portfolio tools available in the market use AI/ML techniques but are mostly built using technical indicators which makes them only suitable for general trend predictions, intraday trading and not suitable for long term value investing due to wide variances and reliability issues. The availability of a Financial Decision Support System which can help stock investors with reliable and accurate information for selecting stocks and creating an automated portfolio with detailed quantitative analysis is lacking. A Financial Decision Support System (DSS) that can establish a relationship between the fundamental financial variables and the stock prices that can VII automatically create a portfolio of premium stocks shall be of great utility to the individual investment community. As part of this thesis, the researcher has designed and developed a Financial Decision Support System (DSS) for selecting stocks and automatically creating portfolios with minimal inputs from the individual investors. The Financial DSS is based on a System Architecture combining the advantages of Artificial Intelligence (AI), Machine learning (ML) and Mathematical models.
In other words, we can say that Stock Market is the way out for every investor in Today’s time to make their money by scoring profits in the market itself. Therefore, the correct identification of algorithms for the stock market prediction model is needed so that an investor can successfully raise profits. In the dynamic world of financial markets, accurate price predictions are essential for informed decision-making. This research proposal outlines a comprehensive study aimed at forecasting stock and currency prices using state-of-the-art Machine Learning (ML) techniques. By delving into the intricacies of models such as Transformers, LSTM, Simple RNN, NHits, and NBeats, we seek to contribute to the realm of financial forecasting, offering valuable insights for investors, financial analysts, and researchers.