Stock Forecast Methods

Stock Market Trading and Investing

Stock Price Forecast by Pattern Similarity

Pattern recognition systems are able to classify data based on statistical information extracted from the patterns. The patterns should be classified in order to extract useful information. Normally, a pattern recognition system consists of the input, data converter, an extraction processor to classify accordingly to descriptive scheme, and output grouped data. The most popular systems are based on statistical pattern recognition, i.e., statistical classification of patterns, assuming that the patterns are generated by a probabilistic system.

If we assume that some patterns are repeatable in the future, we can use selected present patterns to predict the future ones. Investment Analyzer (IA) by Addaptron Software has an extra feature to predict prices of the selected stock (index) using pattern similarity. The prediction period can be chosen from 1 day to around 60 trading days; the period of historical data that used for matching should be in 4..16 times longer than prediction period. IA searches for the best match from the internal database by scanning all historical data.

IA ranks all possible matches on the basis of minimum deviation and maximum correlation within given historical period. IA performs pattern matching using open, high, low, and close prices and volume data. When scanning is completed, IA composes forecast using several best matched patterns (top ranked). Since the statistical regularities of the patterns help to create more stable picture, IA allows adding up many top-rated patterns. The composite result is built as a weighted average with weights proportionally patterns’ ranks. The number of patterns that form composite forecast can be adjusted; the number range is 1..99.

The chart below has been plotted using IA pattern similarity feature. SP-500 index prices have been used as input; the output is predicted prices for two weeks of April 2010:

Stock Price Forecast by Pattern Similarity

© Alex Shmatov. Published with permission of the copyright owner. Further reproduction strictly prohibited without permission.

April 8, 2010 Posted by | Stock Market Forecast, Stock Market Software | , , , , , , , , | Leave a comment

Latest Cycle Analysis Forecast: Stock Market Uptrend until April 2010

According to a revised cycle analysis forecast, SP-500 index performance until April 7, 2010 expected to be positive. Evidently, previously predicted negative move was reversed by good fundamental news. The chart has been plotted using Stock Market Analyzer-Predictor SMAP-3.

Latest Cycle Analysis Forecast: Stock Market Uptrend until April 2010

Nothing in this piece or in this blog should be construed as investment advice in any way. Always do your own research or/and consult a qualified investment advisor. It is wise to analyze data from multiple sources and draw your own conclusions based on the soundest principles. Be aware of the risks involved in stock investments.

March 19, 2010 Posted by | Stock Market Forecast | , , , , , | 2 Comments