Predicting Stock Prices and Making $$$ Using the ARMA Model

Can we use the ARMA model in time series to make $$$ trading stocks?

[wcemkfd]

Who votes for this has the coolest video on trading with python? I definitely do.

[MlleNnCo]

Really appreciate your effort to teach/demystify all these models! And always going straight to the point. Keep them coming 🙏

[nishadseeraj]

you're a great teacher man! really appreciate all the material

[gracehui]

I was playing around with arima for weeks and never got any progress. Thank you so much for this. It's really important and thankful to have a guide along the way!!

[RoahanRoy]

Started watching these videos for my Financial Econometrics exam, now hooked on to the practicality of it. Thanks a lot!!!

[Thahid]

Very insightful! Especially the part about overfitting. Definitely something I might’ve overlooked.

[ResilientFighter]

Great job ritvik! Always a pleasure to watch your videos

[GohOnLeeds]

You know in this model you picked a down trend right i.e. a bear market? It's very difficult for any buying scheme to work in a down market :-) My guess is that the ar(5) model happened to work because it bought less often than the other models. When you buy less, the variance is much greater and you happened to get lucky on the days you bought. Run the same ar(5) on a different stock and it will likely lose in a bear market as well. Which brings me to one big issue. When choosing historical data points, it's obvious you get to choose whether you were in a bull or bear or trending market. If you had happened to choose a bull market, then all of these models would have likely made money. So the key to stock trading is not so much the model, it's when you put your money in :-) Peace

[HenningPhysics]

Amazing Video! I sometimes play with ARMA models and stock prices to see how it works and indeed after some dense exploratory data analysis oen could combine some "features" in the decision making which increases a lot a the result!! Super cool man, if you could do that more of these videos would be amazin!

[spytheman]

As usual great video! Really love your explanation and passion in these!

[happykutty]

Nice, in my senior project we used ARIMA and Prophet to predict stock and bond prices.

[orjihvy]

this was a really interesting video. can you do more applied videos, as a recommendation.

[joysun]

This is really interesting! Instructive but also practical. Love it!

In addition, I'm learning time series analysis and is confused about how to determine the orders for ARMA model❓ The way I am doing it now is just trying out different combinations of the orders, with no idea what I am doing. Hope there is a video explaining it

[hpix]

Nice video! Is the model doing well partly because we're backtesting it on the same set we ran the acf plot on? Presumably you'd have to split your data to estimate its performance out of sample?

[Darth_Cassius_]

Amazing video, I will start with ARMA model but I want my main model to be NN model, can not wait to start losing money

[VadimChes]

As example it's fine, but not for real trading, which has spread between best buy and best sell price, commissions for deals and impossibility to get strict open market price and close price. I spent much time to find something stable method to trade - Q-learn, random forest, ARIMA, cointegration, simple moving averages and their combinations... But it seems that trading is more about risk control, when you simultaneously have several positions, each of specific size depending on volatility and correlation between stock in your portfolio. But now I look at fundamental data like companies financial reports and P/E and so on... The less trading the better results as for me ) I think high frquency trading is something possible to earn with models of order book behaviour, but you need huge amounts of money to get profit (making thousands deals every day with minimal profit each one) and build trading architecture like computers near exchenge and super optimized, well tested code.

[kamil]

Great video! I have just 1 remark. The language of selected language of autogenerated subtitles is selected incorrectly. It is really helpful for people that learn English using youtube videos and sometimes don't hear exactly your words.

[chougaghil]

To compare the performance of the models you can check the information criterias (bic, Aic) of each model, select the lowest, check the noise level, check the normality of the distribution, p- value of each coefficient, plot the predicted values against real ones, use Error metrics, try arima to integrate the original time serie...some basic stuff I learnt during my DS training
I wonder why you didn't do it, or simply suggest it to keep your video short
Nevertheless, it was a nice introduction for complete beginners in the field

[vulcaneric]

Hitting the like button wasn't enough... awesome video! thanks!

[khalmouhajir]

Great and concise video. Trying to implement a similar model using a non-parametric Garch Model.