Artificial Neural Network and the Financial Markets: A Survey

This study describes the structure and function of a new financial modeling technique, namely, the Artificial Neutral Network (ANN) in predicting financial markets' behavior. With the advancement of the computer technology to date, ANN allows us to imitate human reasoning and thought processes...

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Bibliographic Details
Published in:Managerial finance 2000, Vol.26 (12), p.32-45
Main Authors: Chatterjee, Amitava, Ayadi, O.Felix, Boone, Bryan E
Format: Article
Language:English
Subjects:
Artificial intelligence
Computers
Decision making
Discriminant analysis
Estimates
Financial institutions
Financial markets
Fourier transforms
Genetic algorithms
Information processing
Investors
Modelling
Neural networks
Power
Regression analysis
Securities markets
Time series
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Summary:This study describes the structure and function of a new financial modeling technique, namely, the Artificial Neutral Network (ANN) in predicting financial markets' behavior. With the advancement of the computer technology to date, ANN allows us to imitate human reasoning and thought processes in identifying the optimal trading strategies in the financial markets. The paper identifies the theory and steps involved in performing ANN and Generic Alogorithm in financial markets, the accuracy of the computer learning process, and the appropriate ways to use this process in developing trading strategies. It further discusses the superiority of ANN over traditional methodologies. The study concludes with the description of successful use of ANN by various financial institutions.
ISSN:0307-4358
1758-7743
DOI:10.1108/03074350010767034