Strictly speaking, A.N.N. ,a neural network, is the same like normal trading systems. A.N.N. only use a neuronet instead of common indicators. A neural network for Forex is widely known that the largest trading firms and hedge funds use sophisticated artificial intelligence and neural network systems to profit from the financial markets with staggering accuracy. Unlike the traditional data structure, A.N.N. take in multiple streams of data and output one result, the best logical one. If there’s a way to quantify the data, there’s a way to add it to the factors being considered in making a prediction. A.N.N. can mimic human intelligence but don’t reach a human’s level of intelligence, therefore, there is no point in using those techniques on a time scale at which a human could easily be working. Their advantage comes from speed of operation and constant activity. A.N.N. need a lot of data to train her artificial brain efficiently and this amount of data will only be found in high frequency trading.
The basic idea is that when presented with examples of pairs of input and output data, A.N.N. will learn the dependencies, and apply those dependencies when presented with new data. From there, A.N.N. can compare its own output to see how close to correct the prediction was, and go back and adjust the weight of the various dependencies until it reaches the correct answer. A.N.N. is very good at combining technical and fundamental data. A.N.N. can find patterns that may not have been considered, and apply those patterns to prediction to come up with uncannily accurate results.