Select the Appropriate Algorithm

The sole purpose of this work is to identify the top performing stocks, and the historical data that is used for the training process will have a known outcome (whether it is considered top performer or otherwise). Therefore, algorithms designed for supervised learning are ideal. Among the available algorithms, the backpropagation algorithm designed by Rumelhart, Hinton, and Williams (1986) is the most suitable, as it is being intensively tested in finance. Moreover, it is recognized as a good algorithm for generalization purposes.

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