Quote from: K128kevin on April 05, 2014, 06:24:54 AM

Quote from: twiifm on April 05, 2014, 05:40:09 AM

Human behavior predictable at the extreme. I agree on that. Large spikes always follow by selloff. But without extremes its random.

I trade every day and I watch tick for tick on some stocks I trade. Yes there are patterns but the pattern presents itself after each candle is drawn. Theres always a lag that makes it useless as a predictor.

I love trading breakout patterns. Breakouts occur after consolidation. But I don't know direction of breakout or to what price.

Its not that I don't believe you. I've never met anyone who claim they can predict next days price.

I hope you become filthy rich and teach me your system

You should search Google for studies using neural networks for stock price prediction. You will find plenty of examples of it being done successful.

I will reiterate my main point that I expressed before though: Neural networks can find patterns that humans can't. Just because we can't see patterns or understand them doesn't mean that they aren't there. Neural networks can find complex and extensive patterns that no human could possibly ever understand. I use 60 inputs to predict the 24 prices for the 24 hour prediction. The hidden layer has 200 inputs. This basically is like representing a function with 12,000 variables. Obviously this is extremely complicated, and obviously there is no way a human could understand a function like this.

No matter how often you trade and how much time you spend trying to understand patterns in price fluctuations, you will never come even remotely close to being able to understand these patterns as thoroughly as a properly implemented neural network. It's like trying to beat a calculator at math - you can't do it.

Describe what you are doing and ill tell you if human is better or not. HFT does not predict. HFT front run orders and capture the spread. It can do this better humans cause it can do it faster.

But humans program it to do this.

I dont know if a machine can find patterns better than humans. Give me a real world example

Let's do a test. We guess the open close price each day of S&P for next 10 days. If you're right you get a point. Whoever scores the most point wins. Just an experiment to see if your algo can guess the price better than me.

At market close you have to guess the open price. At open you guess the closing price. Your allowed to be off by +/- 50c