Neural Networks as a Decision Maker for Stock Trading: a Technical Analysis Approach
There has been a growing interest in applying neural networks and technical analysis indicators for predicting future stock behavior. However, previous studies have not practically evaluated the predictive power of technical indicators by employing neural networks as a decision maker to uncover the underlying nonlinear pattern of these indicators. The objective of this paper is to investigate if using these indicators as the input variables to a neural network will provide more accurate stock trend predictions, and whether they will yield higher trading profits than the traditional technical indicators. Three neural networks are examined in the study to predict the short-term trend signals of three stocks across different market industries. The overall results indicate that the proportion of correct predictions and the profitability of stock trading guided by these neural networks are higher than those guided by their benchmarks.
S. Thawornwong et al., "Neural Networks as a Decision Maker for Stock Trading: a Technical Analysis Approach," Journal of Smart Engineering Systems Design, Taylor & Francis, Oct 2003.
The definitive version is available at http://dx.doi.org/10.1080/10255810390245627
Engineering Management and Systems Engineering
Keywords and Phrases
Stock Prediction; Stock Trading; Technical Indicators; Trend Signal; Neural networks (Computer science); Stock price forecasting
Article - Journal
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