Machine learning techniques for stock price prediction and graphic signal recognition

Abstract

Stock market analysis is extremely important for investors because knowing the future trend and grasping the changing characteristics of stock prices will decrease the risk of investing capital for profit. Thereupon, the prediction of stock prices and identifying the graphic signals of candlestick charts, which are two crucial tasks in stock price analysis, attract much attention from investors owing to the returns and risks that coexist in financial markets. To introduce a reliable approach for addressing these challenges, this paper proposes the modeling strategies based on machine learning (ML) techniques. A vector autoregression (VAR)-based rolling prediction model is proposed for forecasting stock prices, and a Gaussian feed-forward neural networks (GFNN)-based graphic signal identification method is introduced to recognize different types of stock price signals. The experimental results demonstrate better performance comparing with the state-of-the-art methods, and it can be successfully applied in real-world stock exchange strategies.