Prediction: Breaking $500 within 24 hours

[twiifm]

Any trader knows its impossible to predict the future.

Look up Random Walk Theory

[1714795195]

1714795195

[K128kevin]

Any trader knows its impossible to predict the future.

Look up Random Walk Theory

It's not impossible and people do it all the time. People make ridiculous amounts of money by predicting stock price movement seconds ahead of time and making super short term trades, seconds apart. This is just trying to do it on a longer term scale. And it seems to be working pretty well. Definitely better than any human could do.

[paulsonnumismatics]

It's not impossible and people do it all the time. People make ridiculous amounts of money by predicting stock price movement seconds ahead of time and making super short term trades, seconds apart. This is just trying to do it on a longer term scale. And it seems to be working pretty well. Definitely better than any human could do.

It is impossible. And has been demonstrated repeteadly and using different approaches and models. In a 30 year span a coin toss model has the same ROI than the 99.99% Hedge funds.
Then there is Warren Bufett. 

Don't mistake the skill and discipline that takes to anticipate tendencies with the magic power of making predictions.

Read this last sentence again.

Bingo ;-)

[K128kevin]

It is impossible. And has been demonstrated repeteadly and using different approaches and models. In a 30 year span a coin toss model has the same ROI than the 99.99% Hedge funds.
Then there is Warren Bufett. 

Don't mistake the skill and discipline that takes to anticipate tendencies with the magic power of making predictions.

Read this last sentence again.

Bingo ;-)

For you to argue that it is impossible to anticipate price changes using software is like arguing that it is impossible to go to the moon. You honestly could make a more convincing argument that it is impossible to go to the moon. You see here right in front of you, on my website, that I - as an undergrad studying computer science, far from a financial expert - was able to do it myself. This means that obviously people with much more experience than me can do it. And they do it on a regular basis. Use Google... you'll see that these types of strategies are commonly employed and proven to be successful.

Also honestly I find it hard to believe that anybody can believe that THIS is impossible. After all that humanity has done, all of our complex and great technological achievements, you think that predicting stock prices with reasonable accuracy is impossible? It's very possible and I have done it. So have many others.

[twiifm]

Any trader knows its impossible to predict the future.

Look up Random Walk Theory

It's not impossible and people do it all the time. People make ridiculous amounts of money by predicting stock price movement seconds ahead of time and making super short term trades, seconds apart. This is just trying to do it on a longer term scale. And it seems to be working pretty well. Definitely better than any human could do.

Who are these people?  You mean HFT?  They are front running trades to capture the spread.  It's similar to what a Market Maker does.

My friend works at an HFT shop in NJ.  All their positions are delta hedged.  They don't make money on predicting the future.  They make money on rebates & capturing the spread

If you claim you can predict then why is BTC not $500?

[K128kevin]

If you claim you can predict then why is BTC not $500?

This is like if a sharpshooter claims that they are pretty good and you ask them "If you are pretty good, then why can't you hit a mosquito's left eyeball from 2,000 meters away with a blindfold on?"

It's not perfect, as I've said many, many times. It is sometimes wrong, which is why it readjusts its predictions every hour. If you read the older posts you would have seen that it readjusted its prediction one hour after I posted this, saying that it would not reach $500. The neural network successfully predicted a pretty significant rise in price.

It doesn't have to be 100% perfect. I was arguing against the ridiculous claim that it is literally impossible to predict bitcoin prices. I'll give you that it's impossible to predict bitcoin prices 100% correctly 100% of the time, but it's very possible to predict them correctly within a reasonable margin of error the majority of the time. This is better than most (probably any, actually) humans could do.

[twiifm]

If you claim you can predict then why is BTC not $500?

This is like if a sharpshooter claims that they are pretty good and you ask them "If you are pretty good, then why can't you hit a mosquito's left eyeball from 2,000 meters away with a blindfold on?"

It's not perfect, as I've said many, many times. It is sometimes wrong, which is why it readjusts its predictions every hour. If you read the older posts you would have seen that it readjusted its prediction one hour after I posted this, saying that it would not reach $500. The neural network successfully predicted a pretty significant rise in price.

It doesn't have to be 100% perfect. I was arguing against the ridiculous claim that it is literally impossible to predict bitcoin prices. I'll give you that it's impossible to predict bitcoin prices 100% correctly 100% of the time, but it's very possible to predict them correctly within a reasonable margin of error the majority of the time. This is better than most (probably any, actually) humans could do.

I'm saying its impossible to mathematically model markets because they are based on human interactions which are totally unpredictable.

The one thing I find "predictable" is that implied volatility reverts to mean.  Not really a prediction.  Just that statistically speaking, volatility is mean reverting (not prices)

How are you predicting price?  What is your model based on?

[K128kevin]

I'm saying its impossible to mathematically model markets because they are based on human interactions which are totally unpredictable.

The one thing I find "predictable" is that implied volatility reverts to mean.  Not really a prediction.  Just that statistically speaking, volatility is mean reverting (not prices)

How are you predicting price?  What is your model based on?

The thing that you have to understand is that just because we, as humans, can't see predictable patterns in a set of data doesn't mean that they aren't there. Neural networks are REALLY good at finding patterns that humans cannot see. The first time I ever implemented a neural network was to recognize hand-written digits. It was able to correctly classify some hand written digits that were written so poorly that I, a human, could not tell for sure if they were one digit or another.

Human behavior is not totally unpredictable. Especially given large numbers of humans. This is besides the point though. The actual cause of price fluctuations is completely irrelevant actually. My computational model has no idea what is causing prices to change because it doesn't matter at all. All that matters is that there are repetitive patterns in the data (which there are). The neural network learns these patterns, and is able to use them to accurately predict bitcoin prices.

You can say you don't believe that bitcoin prices can be mathematically modeled, but it is still true - it's exactly what I'm doing (relatively successfully) here.

[Equate]

Don't know if you right but $500 with in 24 hrs is doesn't looks promising.

[twiifm]

I'm saying its impossible to mathematically model markets because they are based on human interactions which are totally unpredictable.

The one thing I find "predictable" is that implied volatility reverts to mean.  Not really a prediction.  Just that statistically speaking, volatility is mean reverting (not prices)

How are you predicting price?  What is your model based on?

The thing that you have to understand is that just because we, as humans, can't see predictable patterns in a set of data doesn't mean that they aren't there. Neural networks are REALLY good at finding patterns that humans cannot see. The first time I ever implemented a neural network was to recognize hand-written digits. It was able to correctly classify some hand written digits that were written so poorly that I, a human, could not tell for sure if they were one digit or another.

Human behavior is not totally unpredictable. Especially given large numbers of humans. This is besides the point though. The actual cause of price fluctuations is completely irrelevant actually. My computational model has no idea what is causing prices to change because it doesn't matter at all. All that matters is that there are repetitive patterns in the data (which there are). The neural network learns these patterns, and is able to use them to accurately predict bitcoin prices.

You can say you don't believe that bitcoin prices can be mathematically modeled, but it is still true - it's exactly what I'm doing (relatively successfully) here.

Human behavior predictable at the extreme.   I agree on that.   Large spikes always follow by selloff.  But without extremes its random.

I trade every day and I watch tick for tick on some stocks I trade.   Yes there are patterns but the pattern presents itself after each candle is drawn.   Theres always a lag that makes it useless as a predictor.

I love trading breakout patterns.   Breakouts occur after consolidation.   But I don't know direction of  breakout or to what price.

Its not that I don't believe you.   I've never met anyone who claim they can predict next days price.

I hope you become filthy rich and teach me your system

[K128kevin]

Human behavior predictable at the extreme.   I agree on that.   Large spikes always follow by selloff.  But without extremes its random.

I trade every day and I watch tick for tick on some stocks I trade.   Yes there are patterns but the pattern presents itself after each candle is drawn.   Theres always a lag that makes it useless as a predictor.

I love trading breakout patterns.   Breakouts occur after consolidation.   But I don't know direction of  breakout or to what price.

Its not that I don't believe you.   I've never met anyone who claim they can predict next days price.

I hope you become filthy rich and teach me your system

You should search Google for studies using neural networks for stock price prediction. You will find plenty of examples of it being done successful.

I will reiterate my main point that I expressed before though: Neural networks can find patterns that humans can't. Just because we can't see patterns or understand them doesn't mean that they aren't there. Neural networks can find complex and extensive patterns that no human could possibly ever understand. I use 60 inputs to predict the 24 prices for the 24 hour prediction. The hidden layer has 200 inputs. This basically is like representing a function with 12,000 variables. Obviously this is extremely complicated, and obviously there is no way a human could understand a function like this.

No matter how often you trade and how much time you spend trying to understand patterns in price fluctuations, you will never come even remotely close to being able to understand these patterns as thoroughly as a properly implemented neural network. It's like trying to beat a calculator at math - you can't do it.

[freedomno1]

Well I will agree that this chart is plausible so no real reason to disagree with it yet
All we can do is say we will see

[Easy2Mine]

@Kevin
Thanks for adding something new to BTC.
You did a terrible good job.
You are ahead of time for most people to understand how things works.
Most people also never heard of high frequency trading, which has already proven to work succesfully.

[SportsBet]

been following your predictions, they have been consistently off

[K128kevin]

@Kevin
Thanks for adding something new to BTC.
You did a terrible good job.
You are ahead of time for most people to understand how things works.
Most people also never heard of high frequency trading, which has already proven to work succesfully.

Thanks, I'm glad you can actually appreciate it

been following your predictions, they have been consistently off

hmmm, you obviously haven't been following them then. The only time they were consistently off during the past month was for about a 24-36 ish hours immediately after the China ban. They've been wrong before at other times but definitely not consistently.

[twiifm]

Human behavior predictable at the extreme.   I agree on that.   Large spikes always follow by selloff.  But without extremes its random.

I trade every day and I watch tick for tick on some stocks I trade.   Yes there are patterns but the pattern presents itself after each candle is drawn.   Theres always a lag that makes it useless as a predictor.

I love trading breakout patterns.   Breakouts occur after consolidation.   But I don't know direction of  breakout or to what price.

Its not that I don't believe you.   I've never met anyone who claim they can predict next days price.

I hope you become filthy rich and teach me your system

You should search Google for studies using neural networks for stock price prediction. You will find plenty of examples of it being done successful.

I will reiterate my main point that I expressed before though: Neural networks can find patterns that humans can't. Just because we can't see patterns or understand them doesn't mean that they aren't there. Neural networks can find complex and extensive patterns that no human could possibly ever understand. I use 60 inputs to predict the 24 prices for the 24 hour prediction. The hidden layer has 200 inputs. This basically is like representing a function with 12,000 variables. Obviously this is extremely complicated, and obviously there is no way a human could understand a function like this.

No matter how often you trade and how much time you spend trying to understand patterns in price fluctuations, you will never come even remotely close to being able to understand these patterns as thoroughly as a properly implemented neural network. It's like trying to beat a calculator at math - you can't do it.

Describe what you are doing and ill tell you if human is better or not.   HFT does not predict.   HFT front run orders and capture the spread.   It can do this better humans cause it can do it faster.   

But humans program it to do this.

I dont know if a machine can find patterns better than humans.    Give me a real world example

Let's do a test.   We guess the open close price each day of S&P for next 10 days.  If you're right you get a point.   Whoever scores the most point wins.   Just an experiment to see if your algo can guess the price better than me.   

At market close you have to guess the open price.   At open you guess the closing price.  Your allowed to be off by +/- 50c

[K128kevin]

Describe what you are doing and ill tell you if human is better or not.   HFT does not predict.   HFT front run orders and capture the spread.   It can do this better humans cause it can do it faster.   

But humans program it to do this.

I dont know if a machine can find patterns better than humans.    Give me a real world example

Let's do a test.   We guess the open close price each day of S&P for next 10 days.  If you're right you get a point.   Whoever scores the most point wins.   Just an experiment to see if your algo can guess the price better than me.   

At market close you have to guess the open price.   At open you guess the closing price.  Your allowed to be off by +/- 50c

I'm sorry but I'm not going to bother trying to get my software to predict S&P right now because I have a ton of other work to do. If you want to test accuracy, you should just make your own bitcoin price predictions and test their accuracy compared to my charts on this website.

If you want to know how it works look up artificial neural networks on Google. This isn't some simple process that I can explain to you in one post. It's a very complex computational model that people have been developing and researching since the 1940s. You could teach multiple college courses just on neural networks alone. To be honest, it seems like you are refuting 70 years worth of research based on your gut feeling that humans would be better at this - and if we're going to be realistic, computers are better than humans at nearly all tasks involving any type of computation. They're surpassing us quickly in other realms as well. They have been able to beat us in chess for a long time now, they can beat us in almost any other game, and they can even drive cars better than us now. Is it so hard to believe that they can predict stock prices better than us?

[MoreBloodWine]

and skynet is born !

C'mon people, if it's right it's right, if it's wrong it's wrong... ether way just have fun.

[jamesc760]

Kevin,

Thank you for the wonderful tool you have given us. I just hope you will continue to do so.

At this point in time, I think it's almost a moot point how accurate kevin's neural network predicted bitcoin prices are. His tool has only existed only a few weeks. It's only going to get better and more accurate. Scary accurate, I believe.

[K128kevin]

and skynet is born !

C'mon people, if it's right it's right, if it's wrong it's wrong... ether way just have fun.

That's the attitude xD

Kevin,

Thank you for the wonderful tool you have given us. I just hope you will continue to do so.

At this point in time, I think it's almost a moot point how accurate kevin's neural network predicted bitcoin prices are. His tool has only existed only a few weeks. It's only going to get better and more accurate. Scary accurate, I believe.

Glad you like it! And yeah I think the fact that it gets more and more accurate as time goes on is one of the coolest things about a project like this. There really is a relatively small amount of data available since bitcoin is so young, but as more data becomes available the accuracy should improve more and more!