Describe the goal: The aim of your stock prediction system should be made very clear.
Decide
whether you want to forecast short-term or long-term stock prices, choose the stocks or industries
that interest you, and select the metrics you'll employ to gauge the success of your forecasts.
assemble data: Gather information that could affect stock prices, such as financial statements, news
stories, and historical stock price data. This information is available from web platforms, APIs, and
financial data suppliers.
Data preparation and cleaning: Remove any anomalies, missing numbers, or discrepancies from the
data. To prepare the data for analysis, scale, normalize, or otherwise transform it.
Finding meaningful features from the gathered data that might have an impact on stock prices is
known as feature selection and engineering. This might incorporate economic data (earnings per
share, P/E ratio), technical indicators (moving averages, MACD, RSI), sentiment analysis of news
items, or any other data that has already demonstrated predictive potential. Additionally, you can
combine already existing features to make new ones.
dividing the data: Create training, validation, and testing sets from the dataset. The validation set is
used for hyperparameter tweaking, the training set is used to train the model, and the testing set is
used to assess the performance of the finished model.
Make a prediction model choice: Pick a machine learning method that is suitable for your task of stock
prediction. Models that are frequently employed include recurrent neural networks (RNNs) and long
short-term memory (LSTM) networks, as well as linear regression, random forests, support vector
machines, and deep learning models.
Develop the model: Utilize the training dataset to run the selected model. The model's
hyperparameters should be adjusted, and the validation set performance should be assessed. Repeat
this procedure until you get results you're happy with.
Review the model: Utilize the testing set to evaluate the model's effectiveness. Calculate pertinent
assessment measures to assess how successfully the model forecasts future stock values, such as
accuracy, precision, recall, or mean squared error.
Adjust and optimize: If the model's performance is unsatisfactory, go back and review earlier steps to
make the system better. This could entail changing characteristics, experimenting with other
algorithms, gathering more data, or trying out alternative methodologies like ensemble methods.
Deploy the model into a production environment where it can generate predictions in real time if you
are pleased with its performance. Maintain a constant eye on the system's performance, and
periodically update or retrain the model to reflect shifting market conditions.
