Implementation of Moisture-Evaporation Decision Tree for Stock Rate Prediction

– Stock rate prediction always attracts investor; it is not only because of interest but also act as a big challenge and a mystery. This problem is very complex in nature and it is quite dynamic type of problem. A lot of volatility always remains and the Global stock market makes it a more challenging and interesting job of stock prediction. Predicting stock prices is a very risky job which may have lot of errors. These errors needs & should be minimized so that financial losses in investment in stock market can be minimized. In this research paper ,we have applied supervised machine learning algorithm known as moisture and evaporation decision tree (MEDT).To predict stock prices, we have applied last five years of Historical data with attributes: open high, low and close rates and volume of the particular stock. MEDT algorithm on 5 year’s stock data of (historical prices) has been taken for experiments. As we already know that the market news always affects Stock price movements. The current research we have considered positive or negative news about particular stock. If the news is positive it is called moisture and it assigned a weight between 0 and 1 based on the type and the importance of the news for that particular stock. The news is very impactful then and its moisture value maybe point 0.8, otherwise news is less impactful then its value may vary 0.1 or 0.2. If the news is impactful on the stock rate in the positive direction then its magnitude will be positive moisture value otherwise it will be a negative moisture value. Technique is seen successful in 88% cases.