Leveraging Artificial Intelligence to Build Algorithmic StrategiesBrought to you by:

Welcome

Tad Slaff

CEO/Co-founderInovance

• Math background• 6+ years experience

applying AI and ML to algo trading

• Main expertise in forex

Overview

1. Terminology2. Best Practices and Common Pitfalls3. Strategy Development Applications

1. Indicator Selection2. Pattern Recognition Algorithms3. Association Rule Learning

4. Building a live strategy with TRAIDE

Terminology

• Artificial Intelligence• The study and design of intelligent

agents.• Intelligent agent: a system that

perceive its environment and takes action to maximize its chance of success [1].

• Machine Learning• Algorithms that can learn and

make predictions without being explicitly programmed [2].

• Pattern Recognition• Branch of machine learning

focused on uncovering patterns in data [3].

• Association Rule Learning• Discovering interesting

relationships, usually formatted as “if/then” statements [4].

• Big Data• The Four V’s: Volume, Velocity,

Variety, Veracity [5].

Source: https://inovancetech.com/buzzwords.html

Best Practices and Common Pitfalls

1 ) Defining Success• What are you trying to

achieve?

2 ) Simplicity• Do you really need to use AI

or machine-learning techniques?

3 ) Focus on Process• Where are the assumptions or

uncertainties in your workflow?

4 ) Skepticism• Are you confident in your

results?

Indicator SelectionHow do I know which indicators to use when building my strategy?

Indicator Selection: Machine-Learning AlgorithmsDecision Trees or Random Forests

• Splitting the data set using recursive partitioning.

Indicator Selection: Machine Learning Techniques

Wrappers• Leveraging a machine-learning algorithm to select and

evaluate indicator subsets.

Indicator Selection: Machine Learning Techniques

Ensemble Learning• Combining multiple,

uncorrelated classifiers to generate a singular, more robust signal.

Pattern Recognition and Association Rule LearningHow do I find robust entry and exit signals based on the indicators I’ve selected?

Pattern Recognition and Association Rule Learning

Pattern Recognition• Branch of machine learning focused on uncovering patterns

and regularities in data.

Association Rule Learning• Discovering interesting relationships, usually formatted as

“if/then” statements.

Pattern Recognition and Association Rule Learning

1) Recognize Patterns

RSI(3) Open - SMA(50)

Long Between 50 and 70

Open over 20 pips above SMA(50)

Short Less than 25Open between 10 and 5 pips

below SMA(50)

2) Association Rules

Pattern Recognition and Association Rule Learning

Advantages• Leverage machine-learning

algorithms• Transparent• Easily manually

implemented• Leverage human intuition

Disadvantages• Difficult with high

complexity• Large number of indicators• More complex algos or

ensembles• Not inherently easy to

automate• Requires human input

(subjective analyses)

Let’s build a strategy!

Easily apply pattern recognition and association rule learning techniques to build your strategy.

Live Strategy:https://traide.inovancetech.com/#/simulation/56f183a8e4b0aa46bd79ae82

TRAIDE

To Learn Automated Trading

EMAILcontact@quantinsti.com

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