Prediction of Trends in Stock Market using Moving Averages and Machine Learning

摘要

Forecasting the direction of price movement of the stock market could yield in significant profits. Traders use technical analysis, which is the study of price by scrutinizing the past prices, to forecast the future price of the stock. Moving average is a technical analysis tool that helps the trader see the trend and identify key price points for trading the stock. While being a trend indicator, the moving average is also a lagging indicator. Lagging indicator is a financial signal that is given only after a large shift in price has taken place. This paper aims at using Machine Learning techniques on a Technical indicator. The proposed model will apply Regression on Moving averages to reduce the latency of the trading signal given and thus overcome its drawback. The model can predict the reversal of trend by predicting the trading signal given by the moving averages.