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Bellwether Trades: Characteristics of Trades influential in Predicting Future Price Movements in Markets

Tejas Ramdas, Martin T. Wells

arXiv 8 Sep 2024 · Finance — Trading

arXiv:2409.05192 · PDF · DOI · OpenAlex · Extracted main text

Abstract

In this study, we leverage powerful non-linear machine learning methods to identify the characteristics of trades that contain valuable information. First, we demonstrate the effectiveness of our optimized neural network predictor in accurately predicting future market movements. Then, we utilize the information from this successful neural network predictor to pinpoint the individual trades within each data point (trading window) that had the most impact on the optimized neural network's prediction of future price movements. This approach helps us uncover important insights about the heterogeneity in information content provided by trades of different sizes, venues, trading contexts, and over time.

Citation extraction

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Ian Goodfellow, Yoshua Bengio, and Aaron Courville (2016) Deep Learning0.87452100%
2Oliver Hansch and Hyuk Choe (2005) Which trades move stock prices in the internet age?0.64422100%
3David Easley, Nicholas M. Kiefer, and Maureen O'Hara (1997) One day in the life of a very common stock0.51121100%
4James Bergstra, Rémi Bardenet, Yoshua Bengio, and Balázs Kégl (2011) Algorithms for hyper-parameter optimization0.51121100%
5Joel Hasbrouck Measuring the information content of stock trades0.51121100%
6Matthew D Zeiler and Rob Fergus (2014) Deep inside convolutional networks: Visualising image classification models and saliency maps0.51121100%
7Mukund Sundararajan, Ankur Taly, and Qiqi Yan (2017) Axiomatic attribution for deep networks0.51121100%
8Shuhei Watanabe (2023) Tree-structured parzen estimator: Understanding its algorithm components and their roles for better empirical performance0.51121100%
9Y. LeCun, B. Boser, J. S. Denker, D. Henderson, R. E. Howard, W. Hub… (1989) Backpropagation applied to handwritten zip code recognition0.40511100%
10Christopher M. Bishop (2006) Pattern Recognition and Machine Learning0.40511100%

Showing the top 10 of 52 scored citations.