In This Chapter
Examining your data
Exploring your data potential problems
Dealing with outliers and fitting data to a curve
Evaluating your technical analysis
Describing the limitations of a predictive model
In the quest for building a predictive model, you’ll need to make decisions every step of the way — and some decisions are harder than others. Informed decisions — and an awareness of the common mistakes that most analysts make while building their predictive models — give you your best shot at success.
This chapter offers insights on the issues that could arise when you embark on a journey toward the effective use of predictive analytics. At the outset, consider this general definition:
A predictive model is a system that can predict the next possible outcome, and assign a realistic probability to that outcome.
As you build your predictive model, you’re likely to run into problems in two areas — (1) the data and (2) the analysis. This chapter ...