Published On: Mon, Feb 11th, 2013

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.

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About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.