An empirical examination of the use of NN5 for Hong Kong stock price forecasting
by Philip M. Tsang, Sin-Chun Ng, Reggie Kwan, Jacky Mak, Sheung-On Choy
International Journal of Electronic Finance (IJEF), Vol. 1, No. 3, 2007

Abstract: Reliable stock market movement prediction is a challenging task. The difficulty is mainly due to the close to random-walk behaviour of a stock time series. A number of published techniques have emerged in the trading community for prediction tasks. One of them is neural network, NN. In this paper, the theoretical background of neural networks and the backpropagation algorithm is reviewed. Subsequently, an attempt on building a stock buying/selling alert system using a backpropagation neural network, NN5, is presented. The system is tested with data from one of the Hong Kong stocks, The Hong Kong and Shanghai Banking Corporation (HSBC) holdings. The system is shown capable of achieving an overall hit rate of 78%.

Online publication date: Fri, 01-Dec-2006

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