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Hands-On Machine Learning for Algorithmic Trading

You're reading from   Hands-On Machine Learning for Algorithmic Trading Design and implement investment strategies based on smart algorithms that learn from data using Python

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Product type Paperback
Published in Dec 2018
Publisher Packt
ISBN-13 9781789346411
Length 684 pages
Edition 1st Edition
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Authors (2):
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Jeffrey Yau Jeffrey Yau
Author Profile Icon Jeffrey Yau
Jeffrey Yau
Stefan Jansen Stefan Jansen
Author Profile Icon Stefan Jansen
Stefan Jansen
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Table of Contents (23) Chapters Close

Preface 1. Machine Learning for Trading 2. Market and Fundamental Data FREE CHAPTER 3. Alternative Data for Finance 4. Alpha Factor Research 5. Strategy Evaluation 6. The Machine Learning Process 7. Linear Models 8. Time Series Models 9. Bayesian Machine Learning 10. Decision Trees and Random Forests 11. Gradient Boosting Machines 12. Unsupervised Learning 13. Working with Text Data 14. Topic Modeling 15. Word Embeddings 16. Deep Learning 17. Convolutional Neural Networks 18. Recurrent Neural Networks 19. Autoencoders and Generative Adversarial Nets 20. Reinforcement Learning 21. Next Steps 22. Other Books You May Enjoy

Summary

In this chapter, we explored the use of topic modeling to gain insights into the content of a large collection of documents. We covered Latent Semantic Analysis, which uses dimensionality reduction of the DTM to project documents into a latent topic space. While effective in addressing the curse of dimensionality caused by high-dimensional word vectors, it does not capture much semantic information. Probabilistic models make explicit assumptions about the interplay of documents, topics, and words that allow algorithms to reverse engineer the document generation process and evaluate the model fit on new documents. We saw that LDA is capable of extracting plausible topics that allow us to gain a high-level understanding of large amounts of text in an automated way, while also identifying relevant documents in a targeted way.

In the next chapter, we will learn how to train...

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