| OCT 1993
Preprocessing Data For Neural Networks by Lou Mendelsohn
Preprocessing Data For Neural Networks by Lou Mendelsohn Today's global markets demand new analytical tools for survival and profit as prevailing methods of analysis lose their luster. Here, Stocks & Commodities contributor Lou Mendelsohn explains how an emerging method of synergistic market analysis can be applied to neural networks for financial forecasting and discusses how to select and combine various types of market information and transform the data into a format appropriate for neural network training. With the rise of artificial intelligence technology and the growing interrelated markets of the 1990s offering unprecedented trading opportunities, technical analysis simply based on single market historical testing is no longer enough. To meet the trading challenge in today's global markets, technical analysis must be redefined. I propose a multidimensional method of analysis known as synergistic market analysis, which utilizes artificial intelligence technologies, including neural networks, to synthesize technical, fundamental and intermarket data. Synergistic analysis can quantify and discern underlying relationships and patterns between related markets, capturing information that reflects global market dynamics, which can markedly improve trading performance. Previously, I discussed the selection of neural network paradigms and architectures for synergistic trading. This time, I will explore several issues related to input data selection and preprocessing. Because available technical, intermarket and fundamental market data is extensive and useful preprocessing methods quite extensive, here are some ways to handle input data effectively and efficiently in developing neural networks.
by Lou Mendelsohn
Technical Analysis of STOCKS & COMMODITIES
The Traders’ Magazine since 1982
has had over 1,226,237 subscribers from 174 different countries.
37,000 Page Traders’ Archive for $89.99
To continue reading, sign-up for trial access to Traders.com and the S&C Archive — 37,000 pages of trading ideas!
After verifying your email address, you will have limited access to the S&C Archive, as well as access to a Digital Edition of S&C, and access to Traders.com Advantage and Working Money for 30 days.
Not a subscriber to Technical Analysis of
STOCKS & COMMODITIES magazine?
Click
here to subscribe, or request
a trial subscription.
Log-in now to view articles from the S&C Archive.
Your Subscriber ID is located at the top of your magazine label, highlighted here in red.
Your last name can be found on the second line, highlighted here in blue.
*If you have a company name on the label, that can also be used. It will appear below your name on the label.
If you do not have a Subscriber ID on your label, you can find it on your statement or renewal form.
For help locating your Subscriber ID number, please call us at 1-800-832-4642 or send an email to Survey@Traders.com. If sending an email, please include your name and mailing address.