How does one use AI techniques in trading?
Setup is like “Issue Screening or Scanning/Exploration (Expert System (ES).” Fundamental Analysis (FA) or a Mechanical System (MS) should give unambigous buy/sell signals therebly giving commitment to one’s methodology and discipline/self-discipline to act on those signals. The ES is responsible for searching for the most favorable investment opportunities, according to some predefined rules or knowledge gained from facts by applying logic to facts. FA, TA etc., are then used to further refine the ES findings. In the case of ES, the human brain is trained and learns to identify patterns from experience (e.g., Chart patterns – PsychoAnalysis (PA)). In the case of a Neural Nets/Bayesian Nets (NN/BN) with its ability to combine FA & MS when given the Fundamental data and MS signal inputs, the network can be trained and it learns to identify patterns from experience. But it is interesting to note that combined with an ES, a significant improvement can be achieved with NN/BN WITHOUT deep do
