After today’s wild day for GLD ETF price, I have realized that even though the algorithm cannot predict the direction of the news that will affect the underlying securities, it is able to predict the magnitude of the investors’ reactions to the news. The ANN algorithm is unable to fully predict the actual price of the security, however, it is able to predict the general market atmosphere for the security. As we implement the strategies this week, we saw the price of GLD ETF being pulled towards our predicted result, even though there has been news driving the price movement in the opposite direction.
We will begin to take a multi-dimensional approach to analyzing securities using our algorithms. To yield more reliable, and hopefully more accurate, predictions, we will integrate the data of correlated securities into the prediction algorithm for GLD ETF. To ensure maximum profit and highly probability of profit, we will also create an ANN algorithm to predict volatility of the underlying securities. By doing so, we can more effectively implement both long and short option strategies. Even though it has only been a short period of time, we have seen effectiveness in our algorithm and trading strategies. We are constantly wondering what else we can do with our Deep Learning Algorithms.
We will have the 2nd weekly paper trading performance report on Friday, November 3rd.
“Skrrrrrat, Skidi-kat kat….
….BOOM” – Big Shaq (2017)
Havergal 