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Stock-Prediction

ARTIFICIAL NEURAL NETWORKS:

The idea of ANNs is based on the belief that working of human brain by making the right connections, can be imitated using silicon and wires as living neurons and dendrites. The human brain is composed of 86 billion nerve cells called neurons. They are connected to other thousand cells by Axons. Stimuli from external environment or inputs from sensory organs are accepted by dendrites. These inputs create electric impulses, which quickly travel through the neural network. A neuron can then send the message to other neuron to handle the issue or does not send it forward. ANNs are composed of multiple nodes, which imitate biological neurons of human brain. The neurons are connected by links and they interact with each other. The nodes can take input data and perform simple operations on the data. The result of these operations is passed to other neurons. The output at each node is called its activation or node value. Each link is associated with weight. ANNs are capable of learning, which takes place by altering weight values.

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Machine Learning in ANNs:

ANNs are capable of learning and they need to be trained. There are several learning strategies −

Supervised Learning − It involves a teacher that is scholar than the ANN itself. For example, the teacher feeds some example data about which the teacher already knows the answers. For example, pattern recognizing. The ANN comes up with guesses while recognizing. Then the teacher provides the ANN with the answers. The network then compares it guesses with the teacher’s “correct” answers and makes adjustments according to errors.

Unsupervised Learning − It is required when there is no example data set with known answers. For example, searching for a hidden pattern. In this case, clustering i.e. dividing a set of elements into groups according to some unknown pattern is carried out based on the existing data sets present.

Reinforcement Learning − This strategy built on observation. The ANN makes a decision by observing its environment. If the observation is negative, the network adjusts its weights to be able to make a different required decision the next time.

Normalisation:

Normalization is a technique often applied as part of data preparation for machine learning. The goal of normalization is to change the values of numeric columns in the dataset to a common scale, without distorting differences in the ranges of values.

MinMaxScaler

MinMaxScaler scales all the data features in the range [0, 1] or else in the range [-1, 1] if there are negative values in the dataset. This scaling compresses all the inliers in the narrow range [0, 0.005]. In the presence of outliers, StandardScaler does not guarantee balanced feature scales, due to the influence of the outliers while computing the empirical mean and standard deviation. This leads to the shrinkage in the range of the feature values.

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