A Critical Review of the Effectiveness of Machine Learning & Deep Learning Approaches in Forecasting Stock Market Trends

Abstract

For a long time, traders as well as researchers have been actively interested in financial market forecasting. A financial market prediction has an interest for investors & researchers since long time. An existing method for predicting stock prices often rely on technical and fundamental analysis, which have limitations in handling the complexity and volume of financial data. To handle complex data sets for forecasting the value of stock using new emerging learning techniques. The most commonly used approach such as artificial neural networks (ANN), neural network techniques, SVM, decision trees algorithm, and random forests. These techniques can capture complex nonlinear relationships between variables and adjust to changing market conditions. The machine learning & deep learning analyze the trend for the future values of stock prediction and provides observation for making decision. The importance of feature selection and data preprocessing are used for improving the prediction accuracy of stock value. The genetic method feature selection concept can reduce the dimensionality of the data and remove irrelevant features, while data preprocessing techniques such as normalization and scaling can improve the stability and convergence of the algorithms. Sentiment analysis of social media data can capture market sentiment and investor behavior, while news articles can provide insights into company performance and industry trends. The accuracy of predictions tends to decrease as the prediction horizon increases and the prediction accuracy varies across different stock markets. A lot of significant work, the most recent stock market-related prediction system includes multiple limitations. Now the conclusion, the projection of stock markets is a hybrid approach & certain parameters for stock market forecasting should be as accurate as possible.