Re: NN and Financial market.

Konstantin Grudnev354000071 wrote:
> 
> Is it possible to forecast financial market behavior with NN ?
> 

Yes.  

But not really more accurately than a financial analyst who actually
researches individual companies.  

NN and similar tools are nice ways of cutting through the bullshit 
which is prevelant in the financial industry, but all they will 
tell you is when people are just flatout lying.  If the ANN or 
whatever looks at a company or a market and spots the things it 
needs to predict a decline, it's a pretty good indication -- but 
it's going to be an indication of specific problems the "smart 
money" will already aware of, so you're not going to make a lot 
of money with it by being the only one to spot something.

So if an analyst looks at a company that has lots of irregularities 
and a vaporware product and just borrowed a lot of money with an 
equity call and has just fired its QA department, and issues a 
"buy" recommendation?  He knows he's lying.  So do the institutional 
investors.  Your ANN, if its inputs include the stuff about sales 
numbers and the borrowed money, etc, will probably tell you the 
company's in trouble.  So you'll know the analyst is lying, but the 
other market analysts and institutional traders will already know, 
and will have already responded to the information he's lying about. 

There won't really be an edge you can take that their money won't 
have already taken; all it will do is protect you from doing some 
kinds of really stupid things like believing an analyst's 
recommendation. 

                                Bear