Trade Smartly in the Fractal Stock Market with Machine Learning Power
This 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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