A black box model is a magical, computational input-output system, where the input is financial, and market data and the output is investment strategies.
Sounds great, right? Have the black box on the computer do the heavy lifting of deciding what to do with all that cash. But that’s not necessarily the case. Using a black box model can be risky, particularly when the market is going cray (or ‘volatile,’ as the fat cats say).
Crashes in 1987, 1998, and 2015 have people giving black box models some serious stink-eye. Today, black box models include machine learning and AI, and are still controversial, especially during market freak-outs.
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Finance: What is Breakaway Gap?7 Views
Finance a la shmoop.. what is breakaway gap? well Letterman has one yeah that but [David Letterman's front teeth appear]
here we're talking about a trading pattern like on a stock chart like this
thing where the breakaway gap is a sudden change in trading pattern like
you're walking along just fine and easily recognized in comfy double bottom
pattern like this but then blam the company reports an awesome quarter in [Stock chart dramatically rises]
the stock zooms upward outside of the pattern it goes from here to here and
well now what like there's no pattern yet so what do we do well depending on
your lean prayer might help is the stock heading down now to normalize or up more
because now everyone thinks it's the next Google and wants to own it for the
long run so breakaways go up like this and
sometimes they go down like this but either way they break away from a [Arrow points to stock charts breakaway gap]
pattern and yeah, clearly this was not the next Google! oh well
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