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Stock market remains one of the major means of investment It opposed to the traditional model based methods and it
for investors for at least a couple of decades. The Bombay learns from examples and capture subtle functional
Stock Exchange (BSE) is one of the India’s major stock relationships among the data even if the underlying
exchanges and of the oldest exchanges across the world. An relationships are unknown or hard to describe. It gives
attempt is made to predict the closing prices of stock market the ability to learn from experience and provides a
with reference to Tata Consultancy Services Ltd, Wipro Ltd, practical feasible way to solve real world problems.
Dr. Reddy’s Laboratories Ltd and Sun Pharmaceutical Ltd ANNs can generalize and correctly infer the unseen part
listed under BSE using artificial neural networks. Many of the data even if the sample data contain noisy
scientific attempts have been made on stock market to extract information with least principle.
some useful patterns in predicting their movements. This ANNs are universal functional approximators and
patterns helped researchers in developing many models using provides a continuous function for a desired accuracy.
fundamental, technical and time series in forecasting the ANNs are nonlinear. The real world systems are often
competitive predictions of stock prices for the investors. The nonlinear. The existing nonlinear models are limited in
Artificial Neural Networks have the ability to discover the exploiting the explicit relationship for the data series
nonlinear relationship in the input data set without a priori with the little knowledge of underlying law. ANNs
assumption of knowledge of relation between the input and the have the capacity of performing nonlinear modeling
output [1], and hence ANNs suits well than any other models without a priori knowledge about the relationship
in predicting stock prices. An ANN is able to form judgments between input and output variables. Thus ANNs are a
or achieve stable configuration patterns, even if it is given more general and flexible modeling tool for forecasting.
“fuzzy” or incomplete information [3].
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Integrated Intelligent Research (IIR) International Journal of Web Technology
Volume: 02 Issue: 02 December 2013 Page No.42-48
ISSN: 2278-2419
A maximum network error of 0.01, momentum coefficient that the effectiveness of dynamic backpropagation algorithm. By
ranges from 0.1 to 0.9 and learning rate that ranges from 0.1 to using the past historical stock prices of the selected companies
0.9 has been used in the training. The trained network thus under BSE, we tried to predict stock values for future five days
obtained has been tested with randomly selected data from the of April 2013 which are compared to the actual values.
20% data set. Table I displays the comparison between actual values and
predicted values of the closing prices of the companies. Also
VI. RESULTS AND DISCUSSION the forecasting errors associated with the predicted values are
also shown in the table.
Using the developed system to predict the future stock values
with the multilayer perceptron an analysis can be done to know
Figure 3. Actual Vs. Predicted Stock Prices of Tata Figure 5. Actual Vs. Predicted Stock Prices of Dr. Reddy’s
Consultancy Services Ltd Laboratories Ltd
Figure 4. Actual Vs. Predicted Stock Prices of Wipro Ltd Figure 6. Actual Vs. Predicted Stock Prices of Sun
Pharmaceutical Ltd
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Integrated Intelligent Research (IIR) International Journal of Web Technology
Volume: 02 Issue: 02 December 2013 Page No.42-48
ISSN: 2278-2419
It is observed that error was high when we take three inputs for [9] M. Kaastra and M. Boyd, “ Designing a neural network for forecasting
financial and economic time series”, Neurocomputing, 10, P.215-236, 1996.
prediction and it was minimized when we take five inputs. It is [10] J. Racine, “On the Nonlinear Predictability of Stock Returns Using
also observed that the accuracy in prediction is more when we Financial and Economic Variables”, Journal of Business and Economic
take data in continuous dates except in one case in the study. Statistics.19, No3, p380-382, 2001.
However it is well known that the performance of ANNs, with [11] N. Mohan, P. Jha, A. K. Laha and G. Dutta, “Artificial Neural Networks
for Forecasting Stock Price Index in Bombay Stock Exchange”, Indian
respect to forecasting, depends on a variety of factors and the Institute of Management, Ahmedabad, 2005.
performance of the network constructed in this study cannot be [12] B. Vanstone and G. Finnie, “Combining Technical Analysis and Neural
compared easily with the published findings of other studies. Networks in the Australian Stockmarket”. Bond University
ePublications@bond. Information technology papers, 2006.
[13] Z.H. Khan, T.S. Alin and M.A. Hussain, “Price Prediction of Share
VII. CONCLUSION Market using Artificial Neural Network (ANN)”, International Journal of
Computer Applications, 22, No 2, pp. 42-47, 2011.
In our study a highly flexible non-linear modeling technique [14] H. Al-Qaheri, A. E. Haassanien, and A. Abraham, “Discovering stock
ANN has been implemented to forecast the stock prices of price prediction rules using rough sets, Neural network world, vol 18, 181-198,
2008.
selected sectors and companies under Bombay Stock [15] Bruce Vanstone & Gavin Finnie, [2009] “An empirical methodology for
Exchange. The input used in the study is opening price, high, developing stock market trading systems using artificial neural networks, An
low, closing price and volume of the stocks. The predicted international journal of expert systems with applications vol 36, issue 3, 6668-
results demonstrate that artificial neural network has been able 6680.
[16] Mitra Subrata Kumar [2009] “Optimal combination of trading rules using
to predict stock prices with better accuracy if we increase the neural networks” International business research vol 2, no 1 pp 86-99.
number of input data.Yet, there is a considerable scope [17] Altay, E., and Satman, M.H. (2005). “Stock market forecasting:
definitely to build on the study attempted in all possible ways Artificial neural networks and linear regression comparison in an emerging
to predict the stock prices with higher level of accuracy. market”, Journal of financial management and analysis 18(2), 18-33.
[18] Senol, D., and Ozturan, M. (2008). “Stock price direction prediction
using artificial neural network approach: The case of Turkey,” Journal of
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