Enhancing Security Selection in the Australian Stockmarket using Fundamental Analysis and Neural Networks

B. Vanstone, G. Finnie, and C. Tan (Australia)

Keywords

Neural Networks, Stockmarket Trading, Fundamental Analysis, Security Selection

Abstract

This paper examines financial trading from the aspect of security selection. In practice, it is unrealistic for a financial trader to participate in the full market of tradeable securities, and a selection mechanism must be employed to reduce the number of possible securities competing for investment capital. Essentially, there are two main methodologies used, namely, Fundamental Analysis, and Technical Analysis. This paper examines the practice of Fundamental Analysis, and demonstrates how neural networks can be practically employed to enhance the fundamentalist selection process.

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