I found this link via Aleablog and found it be very interesting. These traders are using genetic programming to create several trading models, breed and mutate them for the fittest ones, and then trade them.
Given this complexity, Sokasian and his team spent several months creating a language that would ask the computer to think very abstractly about coming up with a viable trading model. The computer creates a population of some 200 or so models. “You’ve taught the computer how to generate a model on its own,” says Sokasian. It applies certain criteria to the models and trains them on historical data.
Models that performed well during the training period are allowed to go forward into the next gene pool of models. “You assess the performance of each one of the components of the model, then you either allow them to propagate or die off,” says Sokasian. Then begins a process called breeding and mutation. [Wall Street & Technology]
This gives me some ideas on how to use RapidMiner’s Evolutionary and Genetic Algorithm operators. Oh so much to do, so little time!
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