Year: 2025
Type: conference-paper
Abstract: Present financial markets are characterized by great volatility and nonlinear dynamics since they are driven by both quantitative forces and qualitative mood. Traditional trading practices cannot capture such nuance. This study proposes an automated trading system based on machine learning that uses technical analysis as well as sentiment factors for better decision-making. Historical OHLCV stock price data from 2000 to 2025 was augmented with financial indicators such as SMA, EMA, RSI, and Bollinger Bands, as well as sentiment scores based on real-time news via natural language processing. LightGBM regression for predicting the price range and Histogram-Based Gradient Boosting classification for directional prediction were employed. Signals were generated with volatility-adjusted thresholds and classifier confirmation, and a risk management layer enforced position sizing, stop-loss triggering, and drawdown constraint. Back testing demonstrated improved Sharpe ratio, Sortino ratio, and win rates versus baseline strategies. The findings emphasize that the combination of machine learning and sentiment analysis with risk-conscious design improves predictive accuracy, dependability, and preservation of capital in automated trading systems.
Language: English
Field: Decision Sciences
Domain: Social Sciences
Open Access status: gold
OpenAlex ID: W7117308970