GA for trading strategies
Let's apply our fresh expertise in genetic algorithms to evaluating different strategies to trade securities using trading signals. Knowledge of trading strategies is not required to understand the implementation of a GA. However, you may want to get familiar with the foundation and terminology of the technical analysis of securities and financial markets, described briefly in the Technical analysis section of the Appendix.
The problem is to find the best trading strategy to predict the increase or decrease of the price of a security given a set of trading signals. A trading strategy is defined as a set of trading signals tsj that are triggered or fired when a variable x= {xj }, derived from financial metrics such as the price of the security or the daily or weekly trading volume, exceeds, equals, or is below a predefined target value, aj (refer to the Trading signals and strategy section of the Appendix).
The number of variables that can be derived from the...