| # # Attrasoft PredictorPro for Windows
About New Image Classification Image Retrieval Image Examples Image Database Sound Search Image Search Engine Products Services Order Shareware/Demos Future Products Links Search This Site | 5. Predicting the Stock Market 5.1 Data Collection From the Internet 5.2 Data Preprocessing 5.2.1 Sorting 5.2.2 Moving Average 5.3 Commands 5.4 Prediction with Preprocessing: Intel 4 5.5 Prediction Without Much Data 5. Predicting the Stock Market For the sake of discussion, we will predict Intel stock one-month ahead. You can obviously substitute Intel for any other stock or market index. To predict Intel one month ahead, the monthly data is required. You can change the prediction to one-day, one-week, or one-year ahead by substituting daily, weekly, or yearly data, respectively. Attrasoft PredictorPro predicts events based on the past history: If the past and the future are the same, the prediction is expected to be accurate. If the past and the future are different, the prediction should be used as a reference. Before you play real games with real dollars, you should make simulations with past data, or future data (pretending you are playing without the economic cost of your learning experience). Do not jump into predicting the stock market directly without any experience. A reasonable simulation is to set up a model and make 100 - 1,000 predictions. If the results are not satisfactory, change your data set. 5.1 Data Collection From the Internet It is important to avoid any typing in data collection. There are many sites on the Internet, which offer free data. In the following, we will show you how to download data from the “Microsoft Investor” section of the Microsoft Networks. Microsoft Excel is required for the following. Assume we want to collect Intel Corp. (Intc) data, here is the procedure: First Time User: Go to: http://investor.msn.com/quotes/quotes.asp?beenthere=1&Page=Research&Item=QuoteDetail and enter "intc"; On the page, click "Charts"; Click "Start Download"; and when prompted to install a Microsoft software, click "yes'; You should see a test chart now, and click "I see the chart"; Click "Period/10 Years" or other selections you want; To download, click "File/Export Data", at this point, your Excel will be opened and the Intel data is right there. Save the data and the job will be done. After the First Time : Go to http://investor.msn.com/charts/charting.asp?Symbol=intc, on the page enter "intc"; Click "Period/10 Years" or other selections you want; To download, click "File/Export Data". At this point, your Excel will be opened and the Intel data is right there. Save the data and the job will be done. Now, you have obtained the Intel stock data for the last 7 years, and it looks like this: Intel Corporation (INTC) Monthly prices (Dec 1991 to Nov 1998) DATE HIGH LOW CLOSE VOLUME Oct-98 90.813 75.813 89.188 393720800 Sep-98 89 69.75 85.75 369103300 Aug-98 92.625 70.938 71.188 440267900 Jul-98 88.25 72.25 84.438 396391200 Jun-98 77.625 65.656 74.125 360081300 … Apr-92 7.406 6.125 6.688 443011200 Mar-92 8.438 6.438 6.906 424595200 Feb-92 8.594 7.375 7.938 340300800 Jan-92 7.875 5.906 7.484 589994400 Dec-91 6.156 5.031 6.125 260759200 Now we want: Sorting Calculating moving averages Preparing the PredictorPro Data. 5.2 Data Preprocessing 5.2.1 Sorting Now without typing a single number, you have obtained the Intel data in the Excel spread sheet. Before you can use the data, you have to preprocess it for two or three steps: Sorting Calculating Moving averages (Optional) Prepare PredictorPro data The above data file downloaded from Microsoft Investor puts the latest data in the first row and the earliest data in the last row. The PredictorPro can not use this type of data. The PredictorPro uses data in order: the earliest data first, and the latest data last. To reverse the order, in the Microsoft Excel: Highlight the data; click "Data\Sort"; and click "OK". Now the data is sorted in the correct order for the PredictorPro. 5.2.2 Moving Average To save space, please refer to the last chapter. 5.3 Commands Stocks like Intel or Microsoft grow exponentially, therefore, you should use the following commands: Real/+ Exponential Real/-- Exponential 5.4 Prediction with Preprocessing: Intel 4 The data set of this example is: 5-month moving average of Intel 5-month moving average of SP 500 5-month moving average of Microsoft Clicking "Example/Intel 4 ..." can generate this example. The goal is predict the 5-month moving average of Intel on Oct-98, which is 80.9378. Click "Real/-- Exponential", we get Possibility Confidence*Probability 76.0928 1086.51 107.244 92 79.5299 1101.96 103.787 58 --------------------------------------------------- Weighted Average 77.4218 1092.48 105.907 Highest Probability 76.0928 1086.51 107.244 92 Error of each number 0.859271 3.86403 0.86441 The confidence is too low. To change the Trend from 5 to 4, click "Data/link" and enter 4 under Trend. Click "Real/-- Exponential" again, we get the distribution: Possibility Confidence*Probability 86.404 1078.78 102.058 262 77.8113 1071.05 105.515 4000 76.0928 1086.51 100.329 364 81.2484 1063.32 105.515 330 82.9669 1063.32 105.515 398 82.9669 1071.05 105.515 670 79.5299 1094.23 110.702 160 76.0928 1086.51 107.244 228 81.2484 1101.96 108.973 160 79.5299 1101.96 103.787 126 77.8113 1086.51 107.244 364 76.0928 1094.23 110.702 330 --------------------------------------------------- Weighted Average 78.9408 1075.29 105.665 Highest Probability 77.8113 1071.05 105.515 4000 Error of each number 0.859271 3.86403 0.86441 Prediction confidence varies from month to month. The confidence for another month might be much higher. The prediction is 78.9408 ± 0.859271, which is close to 80.9378. 5.5 Prediction Without Much Data There are times you want to predict a new stock, "A", where no data is available. You can substitute the stock, "A", with another similar stock, "B". You have to be careful here: if you use a 5-trend prediction, you must have at least 4 rows of "A" stock. if you use a 6-trend prediction, you must have at least 5 rows of "A" stock. To predict Intel, the data set of this example is: 5-month moving average of Microsoft 5-month moving average of SP 500 Clicking "Example/Intel 5 ..." will generate this example. The goal is to predict the 5-month moving average of Intel on Oct-98, which is 80.9378. Click "Real/-- Exponential", we get Possibility Confidence*Probability 79.0219 34576 76.242 7936 81.8018 20184 84.5816 380 87.3615 256 62.3426 64 --------------------------------------------------- Weighted Average 79.6091 Highest Probability 79.0219 34576 Error of each number 1.38994 Prediction confidence varies from month to month. The confidence for another month might be much higher. The prediction is 79.6091 ± 1.38994, which hits 80.9378. Online Order/Online Fax order: Attrasoft PredictorPro for Windows Version 2.8 ($494.99 + $5 US Shipping and Handling) Mail Order: 499.99 (S&H included) PredictorPro Attrasoft, Attn.: Gina P. O. Box 13051 Savannah, GA. 31406, USA Send questions or comments to: webmaster@attrasoft.com or contact us at: Attrasoft, P. O. Box 13051, Savannah, GA. 31406, USA Copyright © 2001 Attrasoft, Inc. All rights reserved.