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Machine Learning for Finance

You're reading from   Machine Learning for Finance Principles and practice for financial insiders

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Product type Paperback
Published in May 2019
Publisher Packt
ISBN-13 9781789136364
Length 456 pages
Edition 1st Edition
Languages
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Authors (2):
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Jannes Klaas Jannes Klaas
Author Profile Icon Jannes Klaas
Jannes Klaas
James Le James Le
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James Le
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Table of Contents (15) Chapters Close

Machine Learning for Finance
Contributors
Preface
Other Books You May Enjoy
1. Neural Networks and Gradient-Based Optimization 2. Applying Machine Learning to Structured Data FREE CHAPTER 3. Utilizing Computer Vision 4. Understanding Time Series 5. Parsing Textual Data with Natural Language Processing 6. Using Generative Models 7. Reinforcement Learning for Financial Markets 8. Privacy, Debugging, and Launching Your Products 9. Fighting Bias 10. Bayesian Inference and Probabilistic Programming Index

Creating predictive models with Keras


Our data now contains the following columns:

amount, 
oldBalanceOrig, 
newBalanceOrig, 
oldBalanceDest, 
newBalanceDest, 
isFraud, 
isFlaggedFraud, 
type_CASH_OUT, 
type_TRANSFER, isNight

Now that we've got the columns, our data is prepared, and we can use it to create a model.

Extracting the target

To train the model, a neural network needs a target. In our case, isFraud is the target, so we have to separate it from the rest of the data. We can do this by running:

y_df = df['isFraud']
x_df = df.drop('isFraud',axis=1)

The first step only returns the isFraud column and assigns it to y_df.

The second step returns all columns except isFraud and assigns them to x_df.

We also need to convert our data from a pandas DataFrame to NumPy arrays. The pandas DataFrame is built on top of NumPy arrays but comes with lots of extra bells and whistles that make all the preprocessing we did earlier possible. To train a neural network, however, we just need the underlying data...

You have been reading a chapter from
Machine Learning for Finance
Published in: May 2019
Publisher: Packt
ISBN-13: 9781789136364
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