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Stocks, Technical Indicators and Artificial Intelligence through Artificial Neural Networking


At AiStockcharts.com a neural network is used as a non-linear statistical data modeling tool that also incorporates an adaptive learning response to the ever-changing stock market conditions. Neural networks are used to model complex relationships between inputs and outputs in order to find patterns in data. You might ask why do we need a neural network instead of some other mathematical tool. The answer is that the performance of a group of stocks in the stock market does not follow any known statistical distribution such as a normal (bell) curve. In fact, most statistical analysis tools cannot be used since distribution transformation does not work in most cases. We are forced to use non-parametric statistical analysis to analyze technical indicators and their relationship to stock performance.

Click here for additional information on neural networks and artificial intelligence, including diagrams of neural networks.



How does AiStockCharts.com work?


AiStockCharts.com continually analyzes the performance of all S&P 500 stocks based on a growing number of technical indicators. The performance is input into an artificial neural network. The network is adaptive and learns which technical indicators have worked best for particular stocks then leverages that information to make decisions. One decision could be to create a new technical indicator based on what has worked recently in the stock market. Another decision might be to increase the update frequency for certain technical indicators based on volatility or a sudden change in the performance of similar indicators. Decisions are automatically analyzed so that the network learns from its mistakes.

AiStockcharts.com groups similar technical indicators based in part on performance. Indicators that have been found to be historically insignificant are ignored (however, not forever).



 

Any specific investment or investment service contained or referred to in this web site may not be suitable for all visitors to this site. An investment in stocks may mean investors may lose an amount even greater than their original investment. Anyone wishing to invest or speculate in the stock market should seek his or her own financial or professional advice. AiStockCharts.com is not an investment advisory service and does not recommend the purchase or sale of stocks. There are no licensed financial advisors working at AiStockCharts.com.

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING SYSTEM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. THE RISK OF LOSS IN TRADING STOCKS CAN BE SUBSTANTIAL.

Stock trading is speculative and a substantial risk of loss exists. Past performance is not necessarily indicative of future results.

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