Types of Predictions in Stock Trading: Strategies for Success
Different types of predictions in stock trading, including up/down prediction, price prediction, and optimal approaches for setting up ground truth. Learn about heuristic and optimal methods, historical data usage, and techniques for maximizing profit. Discover the significance of dynamic programming, genetic algorithms, and more in stock trading predictions.
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Presentation Transcript
Prediction in Stock Trading Prediction in Stock Trading J.-S. Roger Jang ( ) MIR Lab, CSIE Dept. National Taiwan University jang@mirlab.org, http://mirlab.org/jang 2025/4/13
Types of Predictions in Stock Trading Up/down prediction Classification Use historical data as GT (groundtruth) Price prediction Regression Use historical data as GT Best timings for buy and sell How to set up GT? Heuristic methods Optimal methods Use historical data for prediction and backtest Historical data from 2/13
GT for Buy and Sell: Heuristic Approaches Heuristic approaches to set up GT MA 3 3 RSA 14 14 10% 10% Performance can be evaluated by backtest. 3/13
Prediction of GT Derived by Heuristics For a given date Predict up for m days or down for n days Execute the predicted plan for tomorrow if the prediction tell us to buy or sell Future price prediction Prediction of up/down (classification) One-step-ahead prediction: ??= ? ?? ?,?? ? 1, ,?? 1, ?? 1 . Accumulated prediction: ?1,?2,?3,?4,?5,?6,?7,?8,?9,?10 K-step-ahead prediction 4/13
GT for Buy and Sell: Optimal Approach Problem definition Given the price curve over a long period of time, find buy and sell points (where you can look into the future) such that the overall profit is maximized. Assumptions Approaches Optimal search: Dynamic programming Heuristic search: Genetic algorithms, simulated annealing, randomized search? 5/13
Prediction of GT Derived by Optimal Methods For a given date Predict all the future price using historical data Run DP to predict all the buy and sell points based on the predicted price Execute the predicted plan for tomorrow Future price prediction Time series prediction (regression) One-step-ahead prediction ??= ?(?? ?,?? ? 1, ,?? 1), ?? ?. Accumulated prediction: ?1,?2,?3,?4,?5,?6,?7,?8,?9,?10 K-step-ahead prediction 6/13
References and Resources Python 7 methods to perform Time Series forecasting A comprehensive beginner s guide to create a Time Series Forecast 11 Classical Time Series Forecasting Methods in Python MATLAB Time Series Forecasting Using Deep Learning Time Series Prediction and Forecasting for Prognosis Time Series Analysis Search keywords: time series prediction python/matlab 7/13
