Original Posted by - I can beat Buffett:In last century, trading systems began as chart analysis, where patterns and rules are specified, entry points identified, and trades follow. However, as the financial market become more and more efficient, these kind of rule-based algorithms become less profitable. Therefore, many traders nowadays are exploring the applicability of machine learning and artificial intelligence to design a trading system.In moving to machine learning, traders change their mindset from rules to data.
- Rule: define a rule, then see what happens later.
- Data: identify a desirable trade, then see what happened earlier.In order to compete in trading, your system will need to have some machine learning programs to handle market changes. Here some good textbooks to prepare you for machine learning.
- Pattern Recognition and Machine Learning by Christopher M. Bishop
- Machine Learning: A Probabilistic Perspective by Kevin P Murphy
- Reinforcement Learning by Richard S. Sutton, Andrew G. Barto