Knowledge engineering and expert systems in the financial markets


Jeffrey Mishlove interviews Edward Feigenbaum and Penny Nii for Thinking Allowed.

Jeffrey Mishlove interviews Edward Feigenbaum and Penny Nii for Thinking Allowed.


Between 1986 and 2002, I hosted the weekly television series, Thinking Allowed, interviewing leading figures about psychology, philosophy, science, health, and spirituality. In the interview that is excerpted below, I interviewed Edward Feigenbaum and his colleague Penny Nii. Feigenbaum was widely regarded as the father of the field of knowledge engineering. These interviews were generally done before I began to take a serious interest in the financial markets. So, I did not pay much attention then to the fact that Feigenbaum had attempted, with minimal success, to implement a knowledge engineering version of Robert Prechter’s interpretation of Elliott Wave Theory.

As I think about it, it seems reasonable to me that it should be possible to create knowledge engineered, expert systems based on outstanding traders (such as Rob Hoffman’s whose work I cited in my recent December 18 blog post). But, I do not know the extent to which this approach has ever been attempted or implemented.

Posted in scientific understanding of financial markets, Uncategorized Tagged with: , , , , , , , , , , , , , , , , , , , , , , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *

*

Book Three: Trading With The News

Learn about a news-based trading system that yielded a back-tested, average annualized, compounded return from 2000 to 2011 of 58.6%.

“Only once you’ve done your homework will you be able to understand how the stock market works and learn to distinguish between news and noise.” Maria Bartiromo, Use The News

Book Two: Technical Analysis

Learn about the "trend recalling" algorithm that yielded researchers a simulated annual return of greater than 400% in multiple tests.

“The scientific method is the only rational way to extract useful knowledge from market data and the only rational approach for determining which technical analysis methods have predictive power.”
David Aronson, Evidence Based Technical Analysis

Book One: Analysts’ Forecasts

Learn the strategy, based on analysts' revised forecasts, that yielded researchers an average of 1.13% - 2.19% profit per trade, for trades lasting one to two days?

Learn how certain analysts' recommendations, following brokerage hosted investment conferences, yielded profits of over 3% during a two-day holding period?

Learn how researchers found an average profitability of 1.78% for two-hour trades following an earnings announcement?

"This set of tools can help both ordinary and professional investors alike to re-think and re-vitalize their stock picking, timing and methods. A young, aspiring Warren Buffet could put this book to good use."
James P. Driscoll, PhD, investor

Statistically Sound Machine Learning for Algorithmic Trading of Financial Instruments by David Aronson (software included)

Evidence-Based Technical Analysis by David Aronson

Archive of Earlier Posts