Can Machine Learning Accurately Predict The Stock Market?

And make us all rich in the process

Photo by Chris Liverani on Unsplash

Since the stock market was invented people have been trying to game the system and come up with a way to beat the market.

Thousands of theories and experiments have been conducted and tested over the years with none conclusively beating the market year after year.

Many factors are considered when forming these theories such as company fundamentals, environment, supply and demand, investor psychology and so on.

But some people believe that hope is on the way with machine learning and its vast capabilities would one day soon buck this trend and open the door for riches for people.

In this post we will answer the question of whether machine learning can predict the stock market. But first let’s look at how machine learning works.

How Machine Learning Works

Machine learning is a data analysis technique that learns from experience using computational data to ‘learn’ information directly from data without relying on a predetermined equation. In other words, it gets smarter the more data it is fed.

These algorithms find patterns in data that generate insight to make better and smarter decisions.