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Stock Price Prediction Using Machine Learning With Python

This document discusses using machine learning, specifically regression and LSTM models, to predict stock market values based on previous stock data. It provides background on stock markets and machine learning. RNNs and LSTMs are introduced as techniques for making predictions from time series data. The conclusion states that an LSTM model was built that showed promising results in predicting future stock prices based on past opening prices.

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129 views

Stock Price Prediction Using Machine Learning With Python

This document discusses using machine learning, specifically regression and LSTM models, to predict stock market values based on previous stock data. It provides background on stock markets and machine learning. RNNs and LSTMs are introduced as techniques for making predictions from time series data. The conclusion states that an LSTM model was built that showed promising results in predicting future stock prices based on past opening prices.

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© © All Rights Reserved
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ABSTRACT

• In Stock Market Prediction, the aim is to predict the future


value of the financial stocks of a company. The recent trend in
stock market prediction technologies is the use of machine
learning which makes predictions based on the values of
current stock market indices by training on their previous
values. Machine learning itself employs different models to
make prediction easier and authentic. This focuses on the use
of Regression and LSTM based Machine learning to predict
stock values. Factors considered are open, close, low, high
and volume.
LITERATURE REVIEW
Introduction to stock market
• The stock market refers to the collection of markets and exchanges
where the issuing and trading of equities (stocks of publicly held
companies), bonds and other sorts of securities takes place, either
through formal exchanges or over-the-counter markets.
• Also known as the equity market, the stock market is one of the
most vital components of a free-market economy, as it provides
companies with access to capital in exchange for giving investors a
slice of ownership.
Introduction to Machine Learning
• In 1959, Arthur Samuel defined machine learning as a "Field of
study that gives computers the ability to learn without being
explicitly programmed".
• “The goal of machine learning is to build computer systems that can
adapt and learn from their experience.” Tom Dietterich
• Tom M. Mitchell provided a widely quoted, more formal definition:
"A computer program is said to learn from experience E with respect
to some class of tasks T and performance measure P, if its
performance at tasks in T, as measured by P, improves with
experience E" Definition Machine Learning
Machine Learning Stock Prediction
• The art of forecasting stock prices has been difficult task for many of
the researchers and analysts in fact investors are highly interested
in the research of area of stock price reduction for a good and
successful investment many investors are keen of knowing the
future situation of the stock market.
• In such a scenario an effective prediction for stock markets helped
traders investors and analyst by providing support of information by
providing the future value of stocks.
• In this model we have used RNN and LSTM to predict stock price
RNN
LSTM
Forget Gate
Input Gate
Output Gate
FLOW CHART OF LSTM
CONCLUSION
• This proposes RNN based on LSTM built to forecast future values
for both stock price, the result of this model has shown some
promising result. The testing result conform that this model is
capable of tracing the evolution of opening prices for assets.
REFERENCE
• [1] Batres-Estrada, B. (2015). Deep learning for multivariate financial time series.
• [2] Emerson, S., Kennedy, R., O'Shea, L., & O'Brien, J. (2019, May). Trends and Applications of Machine Learning in Quantitative
Finance. In 8th International Conference on Economics and Finance Research (ICEFR 2019).
• [3] Heaton, J. B., Polson, N. G., & Witte, J. H. (2017). Deep learning for finance: deep portfolios. Applied Stochastic Models in
Business and Industry, 33(1), 3-12.
• [4] Moritz, B., & Zimmermann, T. (2016). Tree-based conditional portfolio sorts: The relation between past and future stock
returns. Available at SSRN 2740751.
• [5] Olah, C. (2015). Understanding lstm networks–colah’s blog. Colah. github. io.
• [6] Paiva, F. D., Cardoso, R. T. N., Hanaoka, G. P., & Duarte, W. M. (2018). Decision-Making for Financial Trading: A Fusion
Approach of Machine Learning and Portfolio Selection. Expert Systems with Applications.
• [7] Patterson J., 2017. Deep Learning: A Practitioner’s Approach, O’Reilly Media.
• [8] Siami-Namini, S., & Namin, A. S. (2018). Forecasting economics and financial time series: Arima vs. lstm. arXiv preprint
arXiv:1803.06386.
• [9] Takeuchi, L., & Lee, Y. Y. A. (2013). Applying deep learning to enhance momentum trading strategies in stocks. In Technical
Report. Stanford University.
• [10] Wang, S., and Y. Luo. 2012. “Signal Processing: The Rise of the Machines.” Deutsche Bank Quantitative Strategy (5 June)

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