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Published byAlbert Wilfred Shelton Modified over 8 years ago
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Soft Computing methods for High frequency tradin
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What is High Frequency Trading Commodity trading using computers Can perform over a million transactions per second Constantly moving orders on and off the market as prices change Use of soft computing for decision making and predictions
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Fuzzy Logic Fuzzy logic is not used on its own Used with neural networks
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Genetic Algorithms Used to optimize trading models and strategy – Trying to match previous market patterns Used in training neural networks Fitness function – Practice trading with real market information – Most profitable genes get passed on
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Neural Networks Used to detect patterns in the market Can use recent transaction history – Isn’t technically insider trading Technically legal is the best kind of legal Based on the assumption of strong EMH Most published research is about predictions on price only – Only useful for eliminating strategies
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For better forecasting Recurrent neural networks are used – Specific information could not be found
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