Machine Learning Trading, Stock Market, and Chaos

taliTali Soroker is a Financial Analyst at I Know First.


Summary
  • There is a notable difference between chaos and randomness making chaotic systems predictable, while random ones are not
  • Modeling chaotic processes are possible using statistics, but it is extremely difficult
  • Machine learning can be used to model chaotic processes more effectively
  • I Know First has employed artificial intelligence and machine learning in order to make predictions in the stock market
  • Definitions for underlined words can be found in the Glossary at the end of the article

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Trade Smartly in the Fractal Stock Market with Machine Learning Power

motek 1This algorithmic article was written by Yutong Li – Analyst at I Know First, Master's candidate at Brandeis University.

Highlights:

  • Although Efficient Market Hypothesis has been a dominated financial theory for years, it fails to give a sensible reason and interpretation of the financial crashes and crises that occurred
  • A more comprehensive financial theory - Fractal Market Hypothesis is capable to explain these crises and provide a clear-cut description of the financial markets
  • Fractal Market Hypothesis puts forward the idea of self-similarity and stability in the market when it consists of investors from a wide range of investment horizons
  • FMH verifies the root of technical analysis under the idea that history can repeat, and this process of pattern-finding can be efficiently attained by machine learning

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Win the Stock Market Game: Machine Learning vs Technical Analysis

motek 1This algorithmic article was written by Yutong Li – Analyst at I Know First, Master's candidate at Brandeis University.

Highlights:

  • Technical analysis seeks to explore past price trends using various indicators and behavior patterns to predict the future movements
  • Similar to technical analysis, machine learning is also performing well in navigating the patterns and trends from historical stock prices
  • Although both technical analysis and machine learning are powerful tools in trading, there are still some problems that technical analysis has but machine learning can smartly handle

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Algorithmic Trading Market: Investor Preferences in Choosing Algorithms during the Pandemic

Emily_portraitThis Algorithmic Article was written by Emily Adelson – Analyst at I Know First.

Why Investors Choose Algo Trading

With the pandemic impacting our lives greatly, investors watched as horror and uncertainty wreaked on the stock market,  many banks and government agencies fell into great debt and markets crashed. Now as markets recover and the pandemic ends, many investors take a bullish outlook on what the market could look like in the future. But this ability to recover the market so quickly was in no

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AI-Driven Algorithmic Trading: Self-driving Car For Stock Markets

I Know First Research Team LogoThis article was written by the I Know First Research Team.

Summary:

  • The AI industry is re-shaping the world, making sci-fi movies inch closer to reality by day.
  • This technology is implemented across very diverse businesses and industries.
  • The same tech that powers your smart trading algorithm today will power your self-driving car tomorrow.

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Unpacking the Ins and Outs of a Chaotic System – How Can We Predict it

I Know First Research Team LogoThis article was written by the I Know First Research Team.

Summary:

  • What is Chaos Theory?
  • Earthquakes – An example of a Natural Chaotic System
  • Randomness vs Chaos 
  • What makes a Chaotic System a Chaotic System
  • Modeling a Chaotic System
  • Can We Really Predict the Stock Market? Psychology of Trading and Feedback Loops

What is Chaos Theory?

Source: Medium

In a chaotic system like weather, a tiny change can make a huge impact. Weather is predicted a few days in advance because small changes in input can produce dramatically different results. 

The most commonly used example to explain chaos theory is the butterfly effect. It says that a butterfly flapping its wings on one end of the world can give rise to a hurricane in another part of the world. It sounds bizarre but it illustrates the huge impact small changes in the factors can have on the outcome. 

Without going into too much mathematical details, I would like to briefly explain how

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Algorithmic Trading Market: Booming Evolution and Bright Future

motek 1This algorithmic article was written by Yutong Li – Analyst at I Know First, Master's candidate at Brandeis University.

Highlights:

  • The global algorithmic trading market has risen tremendously these years, and algorithmic trading has dominated more than 80% of the stock market nowadays
  • Benefits of algorithmic trading today include the elevated speed of execution, reduction in transaction time, lower risk of errors, free of human bias, etc.
  • The total algorithmic trading market is projected to touch $18.8 billion by 2024

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Why Artificial Intelligence Will Always Beat the Market

motek 1This algorithmic article was written by Yutong Li – Analyst at I Know First, Master's candidate at Brandeis University.

Highlights:

  • Despite the controversial opinion on whether Artificial Intelligence could beat the market, AI could still win in many aspects
  • I Know First’s proprietary AI-powered algorithm can make accurate predictions and smartly approach the stock market uncertainty
  • Based on the 1-year evaluation summary, I Know First has predicted ^IXIC, SPY, and QQQ with 100% accuracy in a 1-year time horizon, and has a performance over 62% for for all time horizons

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