Neural Network is the buzzword in Financial Analytics nowadays. You may be thinking now 'what is a neural network?' Well, Neural Network is a state - of - the - art trainable algorithm which is emulated to function like a human brain. Speaking in terms of stock markets, you can train the algorithm with some historical stock market data and the algorithm will predict the pattern for you.
As forecasting of stock markets, currency markets and other markets are becoming increasingly difficult, neural network is gaining prominence among traders to predict where markets are heading in the near future. Certainly, there are reasons for it. As generation is progressing at a fast pace, people are adopting technologies quickly. The usage of Neural Network has amplified because of the availability of several open source software which have the capability to form a neural net framework. To enhance your shareholder wealth maximization, it is desirable that you must be equipped with the knowledge of how neural network is applied in forecasting markets. Though, as a thumb rule you must remember that no forecasting is accurate, but still this neural network can give some valuable insights.
Wondering how to go about it? Read at http://www.geocities.ws/francorbusetti/KaastraArticle.pdf to know how a neural network is designed for forecasting financial time series data.
