Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
S&P 500’s Downward Reversal or Just Profit-Taking Action? - 18th April 19
US Stock Markets Setting Up For Increased Volatility - 18th April 19
Intel Corporation (INTC) Bullish Structure Favors More Upside - 18th April 19
Low New Zealand Inflation Rate Increases Chance of a Rate Cut - 18th April 19
Online Grocery Shopping Will Go Mainstream as Soon as This Year - 17th April 19
America Dancing On The Crumbling Precipice - 17th April 19
Watch The Financial Sector For The Next Stock Market Topping Pattern - 17th April 19
How Central Bank Gold Buying is Undermining the US Dollar - 17th April 19
Income-Generating Business - 17th April 19
INSOMNIA 64 Birmingham NEC Car Parking Info - 17th April 19
Trump May Regret His Fed Takeover Attempt - 16th April 19
Downside Risk in Gold & Gold Stocks - 16th April 19
Stock Market Melt-Up or Roll Over?…A Look At Two Scenarios - 16th April 19
Is the Stock Market Making a Head and Shoulders Topping Pattern? - 16th April 19
Will Powell’s Dovish Turn Support Gold? - 15th April 19
If History Is Any Indication, Stocks Should Rally Until the Fall of 2020 - 15th April 19
Stocks Get Closer to Last Year’s Record High - 15th April 19
Oil Price May Be Setup For A Move Back to $50 - 15th April 19
Stock Market Ready For A Pause! - 15th April 19
Shopping for Bargain Souvenirs in Fethiye Tuesday Market - Turkey Holidays 2019 - 15th April 19
From US-Sino Talks to New Trade Wars, Weakening Global Economic Prospects - 14th April 19
Stock Market Indexes Race For The New All-Time High - 14th April 19
Why Gold Price Will “Just Explode… in the Blink of an Eye” - 14th April 19
Palladium, Darling of the PGEs, Shifting into High Gear - 13th April 19
MMT is a spectacularly Dem idea - 13th April 19
The 'Silver Lines' of Opportunity - 13th April 19
Gold Stocks Bull Market Breakout Potential - 13th April 19

Market Oracle FREE Newsletter

Top 10 AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Stock Projection Using Computer Aided Learning

Companies / Trading Systems Jun 17, 2011 - 01:13 PM GMT

By: Submissions

Companies

William (Bill) Licata writes: This article is an introduction into independent research I’ve conducted into stock price forecasting using computer learning algorithms and stock historical data available from several websites on the internet.  The algorithms have been programmed into C language and runs under windows requiring only a couple of inputs (in its simplest application).  


The software has been developed over approximately 6 years as time permitted and was written so the average investor or day trader could use it.   I’m an algorithm developer by profession and write software for the purpose of testing new algorithms or applying existing algorithm to new applications.  There are multiple ways of using the software, this article will show some test results and make some comments on the test results.   The software is not for sale or is it associated with any subscription service ( not to preclude either from happening sometime in the future).  Whether future articles are submitted will depend on the level of interest this article solicits.  The author hopes visitors to the website will find the article of some interest.

Sample of Test Results

Figure 1 is a plot of the profit or loss trading a group of 5-stocks (AAPL, CMG, CREE, MA and NUE) over approximately a 2 week period.  The stock NUE was added to the group as kind of a neutral stock (not in general one getting high level of media interest).  If the profit and loss is added up over the days test, the net profit is approximately $7.00.  That assumes trading 1-share on each of the 5-stocks based on a

Figure 1 Test Results 31 May to 16 June


1-day projection (open to close).   During the 1st week of testing the software does better than the 2nd week.  The 2nd week is the week stock options expire.  Also notice the big spike the 2nd week (down and up) which I’d attribute to options being sold off.   So I’d raise the hypothesis that there is a different trading pattern going on the week options expire.  The software has no access into the number of outstanding options for the current option period.   That information can be added but it not currently part of the software design.  The amount of testing is small so the statistical accuracy is too low to draw solid conclusions.  I do believe the software can be used to detect trading patterns an changes to patterns over time.   Obviously, news is not a software input so news events can cause the software to give incorrect projections.

Software Projections for 17th June

I’m writing this article on Friday the 17th June.   Table 1 shows the software projections for several stocks including the ones used to create Figure 1.   The accuracy of the projections, the reader can decide for themselves after the market closes.  Notice that the table includes 1-day and 5-day projections to point out that the software is not limited to 1-day projections.   The confidence level is my approximate confidence level.  The software does support back testing and computing a confidence level but the confidence I’d use in this Table is not yet computed in the software.  

Table 1 Software Projections for 17 June 2011



Stock

1-Day

5-Day

Confidence
L-Low, M-Med, H-High

AAPL

Buy

Buy

M

AMZN

Sell

Buy

M

CMG

Sell

Buy

M

CREE

Buy

Sell

L

ISRG

Sell

Buy

M

MA

Buy

Sell

L

NTAP

Buy

Buy

M

NUE

Sell

Buy

M

SNDK

Buy

Buy

M

 

Summary
Since this the purpose of this article is to introduce this subject matter to readers of this website, I’ll keep the article relatively brief.   I will point out that I would not trade just based on the information presented in this article.  The software provides additional information not discussed in this article to protect my intellectual property.  The software is also constantly in development since I am a researcher.  The software may contain undetected errors.

By William (Bill) Licata, Ph.D.
Independent  Algorithm Developer & Researcher

Bio
William Licata is a USA engineer who holds a Ph.D. in electrical engineering and has worked for 20+ years in the development of new products with an emphasis on algorithms and software development.   He still work for private companies in the USA but does independent research in his spare time in the area of applications of computer learning to forecasting.  He holds several patents, has published many papers and has taught short courses within the USA and internationally.   Over the last 6 years, he has been studying stock technical analysis to support applying his research to that application.

© 2011 Copyright  William Licata - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules