Neural Network

A Neural Network refers to the computer programs that are used by traders in automated trading systems.

The concept of the Neural Network is that the programmed computer algorithm searches through large amounts of data in order to discover relationships in trading and market data.  The relationships in the market data are then used to predict the outcome of the market or a security with enough accuracy to allow the trader to place long or short trades with a reasonable amount of positive outcome.  Neural Networks are said to have the ability to adapt to changing data (and therefore market conditions) and are said to “learn” much like the human brain.