MLM Directory

Neural networks within the stock market?

So, can the computers learn better than humans? Since I am an award winning computer programmer and as well the AI is area of personal interest to me, I express strong disbelief in such systems. And not because I reject the idea that a computer brain can surpass the human's such.De facto, I do believe that some day the computer will be much smarter than us, in a positive way, meaning that we will teach from them and they will help us. But partly I doubt in the NN among the stock market because the computer will train itself mainly thanks to the indicators given. Such as, lets assume that a great neural network tries to predict the stock price based on fundamental + technical indicators and their forms, like statistical indicators and so on. That said, the computer will be a perfect fundamental/technical trader, even better, it will be fearless, not greedy and tireless at the same time. Truly a remarkable trader, better than any human. However...lets for a moment consider that there is some truth in EMH. Now you see the disadvantage Even if the computer is able to learn from the EMH, it will be impossible for any deterministic being...not even an extraterestrial to predict the outcome of a random event. Thanks

Public Comments

1. The problem with predicting human behavior is that people are free to change their minds any time they want. People are not machines. They can buy stocks one day and sell them the next on a whim. Stock traders don't have to buy and sell stocks the same way they've done before. Which means that past indicators and past history of trading doesn't necessarily predict the future. The past simply doesn't have enough information to predict the future accurately. Which means that there is a natural limit to what can be predicted accurately, no matter how smart the predictor is.