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I once figured I can use ML to predict stock market movements and I went about buying 5 years of data from CBOE and started working on modeling. At one point I
by jusonchan81 7y ago
I once figured I can use ML to predict stock market movements and I went about buying 5 years of data from CBOE and started working on modeling. At one point I managed to get fairly accurate predictions of movements and I thought I had struck a lottery.
Turns out my training data had tomorrow’s movement indicator in it which I accidentally added. Despite that dumb mistake it was only accurate up to 80% or so. That’s when I realized Im better off with a random number generator.
- radarsat1 7y agoI went down that path briefly too. After having trouble getting results, I realized I needed to check the fundamentals. What did it in for me was finally just doing a simple correlation analysis of earlier prices to later prices, and realizing there is NO CORRELATION. I realized, if there's nothing to predict, no amount of ML will magically figure it out for me, no matter how complex the indicator. (I was just looking at single products.. I suppose this may be completely different when considering multiple products and markets and integrating external information like news sources.. not at all saying that ML can't be applied to the stock market, just that it's not nearly as simple as looking at previous prices to predict future prices, as everyone says... the point being, always check basic correlations!)