Black Box Model

What is a 'Black Box Model'

A black box model is a computer program into which users enter information and the system utilizes pre-programmed logic to return output to the user.

Black Box Model

BREAKING DOWN 'Black Box Model'

The "black box" portion of the system contains formulas and calculations that the user does not see nor need to know to use the system. Black box systems are often used to determine optimal trading practices. These systems generate many different types of data including buy and sell signals.