Neural Networks and Trading

Share:

Trading robots comes in all shapes and sizes and often with various levels of profit – infact I’d venture to say various levels of destruction of your trading account. Reason why I say this is down to the amount of people I’ve seen writing reviews for binary options robots claiming to give the reader the best objective reviews and it hit me, why dont I try to explore this realm and come out with my own automated trading robot with abilities which rival these binary option robots and probably could offer alot more….. but how do I get an edge on these automated trading systems?

Thats when my curiosity perked and I started to hear about Neural Nets being applied to biology and science studies into curing cancer using neural networks to classify and detect patterns in huge data sets, amazingly once a neural net was trained on a specific pattern, these neural networks were able to help the doctors diagnose quicker and provided a way to efficiently find patterns and interesting correlations which would have otherwise been missed by just merely checking on patients once in a while. In fact these type of research has lead to a whole new application for neural networks, all of which are vastly superior and could benefit humanity a whole lot but it is otherwise an old idea of using neural nets, in my case I didn’t know HOW THIS WOULD HELP me to make my trading robot happen but it sounded damn cool and I though to myself

aimforthe moon quote

I thought for a second….If i aim for the moon, I’ll probably miss that and bump into the international space station rather than land amongst the twinkly stars, so instead of trying to studying all the nuances and special rules of trading forex or trying to find the elusive edge to the best black box trading system ever, I decided to trade manually first before I even attempted to try my hand at trading with robots or using automated trading systems, since I believed this would ground me better with a solid understanding of what ACTUALLY happens on the markets and how participants react to changes within sentiment and the interconnected factors which drive an economy and what really happens when world leaders make decisions which really affect the economy and the wider population at large, with this knowledge I would be able to become a better trader but also give me a broad understanding on which instruments I was most comfortable with trading and the timing of my trades would prove to be a very beneficial teacher as well. (Wish I could write a few scary trading journal stories which I had come across but this will take up too much time and probably deserves a section all by itself because oh my dayssssssss there are some criminal trading brokers out there and some proper pirates operating under the guise of being a top level forex broker or trading firm, however I would never use a trading system or automated trading robot with them let alone perform manual trades but that is a story for another time!)

Eventually I settled for the use of Neural networks since i wanted to head towards automation and the eventual aim was to make a trading system of my own rather than buy one, I am now aiming to make a system which mimics my favourite trading style and to be able to take high probability trades with very little draw down and be able to tolerate extreme news events along with being able to operate back propagation and other learning methods to keep the neural network relevant and continually training it along with using commitees of neural networks to help check on different types of data inputs and help derive a trading system which would be profitable long term.

Piece of cake right? LOL I cried and bled and applied my tears to the ashes of my failures, yeah I tried python and even put big money down on software like Neurosolutions and had very interesting experiences with these lot and I dont mean it was a good experience but it did help me grow my experience at a tremendous rate… bottom line of using neural networks for trading forex? Its freakishly NOT EASY but I dont wan to say it was a hard journey since Neurosolution helped me to start my journey into becoming a data scientist. Infact I liked using this so much I ended up buying the acceleration addons which opened my world up to using ASIC (Application Specific Integrated Circuits) for use in bitcoin mining but also as a way to help predict and project price action within forex trading, either several bars ahead to looking into the future by days (I didnt have the power or scale to go any further than a couple of days since my equipment wasnt what you would call enterprise level datacenter/power house of a super computer LOL. This trading on the financial markets and doing backtesting of systems and trialling of said forex trading systems was actually all done on an IBM T420 Laptop with an Nvidia graphics card :)!