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Katz & McCormick 2000 the Encyclopedia of Trading Strategies

Katz & McCormick 2000 the Encyclopedia of Trading Strategies

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Published by: kološ_sloboda on Jan 16, 2012
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A genetic algorithm solves a problem using a process similar to biological evolution.
It works by the recombination and mutation of gene sequences. Recombination and


mutation are genetic operators; i.e., they manipulate genes. A gene is a string of
codes (the genotype) that is decoded to yield a functional organism with specific
characteristics (the phenotype). A chromosome is a string of genes. In the case of

genetic optimization, as caxried out on such problems as those being addressed here,
the string of codes usually takes the form of a series of numbers.

During the simulated evolutionary process, a GA engages in mating and
selecting the members of the population (the chromosomes). Mating involves
crossover and mutation. In crossover, the elements that comprise the genes of dif-
ferent chromosomes (members of the population or solutions) are combined to
form new chromosomes. Mutation involves the introduction of random alterations
to these elements. This provides additional variation in the sets of chromosomes
being generated. As with the process of biological selection (where less-fit mem-

bers of the population leave fewer progenies), the less-fit solutions are weeded out
so the more-fit solutions can proliferate, yielding another generution that may con-
tain some better solutions than the previous one. The process of recombination,

random mutation, and selection has been shown to be an extremely powerful prob-

lem-solving mechanism.

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