J. Mech. Cont.& Math. Sci., Vol.-14, No.-5, September-October (2019) pp 757-766
Copyright reserved © J. Mech. Cont.& Math. Sci.
Sandeep Patalay et al
757
Design of a Financial Decision Support System based on
Artificial Neural Networks for Stock Price Prediction
Sandeep Patalay
1
, B. MadhusudhanRao
2
1
Research Scholar, Dept. of Management Studies, VFSTR (Deemed to be
University), Vadlamudi, Guntur, Andhra Pradesh, India.
2
Professor, Dept. of Management Studies, VFSTR (Deemed to be University),
Vadlamudi, Guntur, Andhra Pradesh, India
https://doi.org/10.26782/jmcms.2019.10.00060
Abstract
Stock markets are highly volatile by nature and difficult to predict due to the
non-linear and complex nature of the market. A system that can forecast and predict the
stock prices is of great value to individual investors who do not have sufficient knowledge
to understand the complex dynamics involved in evaluating and predicting stock prices.
Machine learning focuses on the development of computer programs that can access data
and use it to learn for themselves. Machine learning is widely being used in the financial
domain including prediction of stock prices. Based on the extensive literature review in
this domain, traditional methods of using Machine Learning techniques including
Artificial Neural Networks (ANN) for stock price prediction have taken in to account only
the Technical Features. The current machine learning models do not take in to account
the Intrinsic or fundamental features of the stock; the results of such prediction models
are not accurate and at best could predict an intraday price of stocks with high levels of
Variance. Literature review in the domain of stock predictions has shown that future
stock prices are seldom dependent on the past performance and technical indicators and
they invariably depend on the fundamental value and macro-economic factors.In this
paper, we propose development of anArtificial Intelligence based decision support system
(DSS) for guiding individual investors to buy and sell stocks. The Financial decision
support shall be based on mathematical modeling of the various financial parameters to
predict stock prices on a long term basis with a reasonable degree of accuracy and
eliminate the behavioral biases of human decisions.The ANNs in this study were trained
using open source financial data of select stocks listed on the BSE/NSE. The results of
this study are quite encouraging as the stock prices can be predicted at least one month in
advance and are closer to the real-time market prices. This DSS has the potential to help
millions of Individual Investors who can make their financial decisions on stocks using
this system for a fraction of cost paid to corporate financial consultants and value
eventually may contribute to a more efficient financial system.
Keywords : Decision Support Systems (DSS), Stock Markets, Artificial Intelligence
(AI), Machine Learning (ML), Mathematical Modeling (MM)
JOURNAL OF MECHANICS OF CONTINUA AND
MATHEMATICAL SCIENCES
www.journalimcms.org
ISSN (Online) : 2454 -7190 Vol.-14, No.-5, September - October (2019) pp 757-766 ISSN (Print) 0973-8975