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Learn Algorithmic Trading
book

Learn Algorithmic Trading

by Sebastien Donadio, Sourav Ghosh
November 2019
Beginner content levelBeginner
394 pages
10h 31m
English
Packt Publishing
Content preview from Learn Algorithmic Trading

Decision tree regression

The disadvantage of the regression methods we've seen so far is that they are all linear models, meaning they can only capture relationships between predictors and target variables if the underlying relationship between them is linear.

Decision tree regression can capture non-linear relationships, thus allowing for more complex models. Decision trees get their name because they are structured like an upside-down tree, with decision nodes or branches and result nodes or leaf nodes. We start at the root of the tree and then, at each step, we inspect the value of our predictors and pick a branch to follow to the next node. We continue following branches until we get to a leaf node and our final prediction is then the ...

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Publisher Resources

ISBN: 9781789348347Supplemental Content