Why can neural networks be better than other technical analysis techniques?
A. A neural network can process a huge amount of data and detect those trends and price patterns that cannot possibly be seen in charts by humans or discovered using the traditional technical analysis methods. Neural networks learn from price data and discover complex non-linear dynamic patterns in price movements. Unlike typical technical analysis indicators, neural networks have the ability to learn from the data itself. Neural networks learn the patterns of price data whereas standard analysis techniques assign a model form to the data and then test it to determine whether the data fits the assigned structure or not. A very often, regular trading systems work for a while until the market situation changes, causing the system performance to deteriorate. A neural network-based trading system can be retrained every time you have new data and thus be adapted to any new market situations.
