Fuzzy Logic

AAA

DEFINITION of 'Fuzzy Logic'

A mathematical logic that attempts to solve problems by assigning values to an imprecise spectrum of data in order to arrive at the most accurate conclusion possible. Fuzzy logic is designed to solve problems in the same way that humans do: by considering all available information and making the best possible decision given the input.

INVESTOPEDIA EXPLAINS 'Fuzzy Logic'

Fuzzy logic is often applied by advanced trading models/systems that are designed to react to changing markets. The goal of this type of system is to analyze thousands of securities in real time and to present the trader with the best available opportunity.

RELATED TERMS
  1. Algorithm

    A set of rules for accomplishing a task in a certain number of ...
  2. Program Trading

    Computerized trading used primarily by institutional investors ...
  3. Formula Investing

    A method of investing that rigidly follows a prescribed theory ...
  4. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  5. Neural Network

    A series of algorithms that attempt to identify underlying relationships ...
  6. Institutional Investor

    A non-bank person or organization that trades securities in large ...
RELATED FAQS
  1. What is the variance/covariance matrix or parametric method in Value at Risk (VaR)?

    The parametric method, also known as the variance-covariance method, is a risk management technique for calculating the value ... Read Full Answer >>
  2. What is backtesting in Value at Risk (VaR)?

    The value at risk is a statistical risk management technique that monitors and quantifies the risk level associated with ... Read Full Answer >>
  3. How much variance should an investor have in an indexed fund?

    An investor should have as much variance in an indexed fund as he is comfortable with. Variance is the measure of the spread ... Read Full Answer >>
  4. Can the correlation coefficient be used to measure dependence?

    The correlation coefficient can be used to measure the linear dependence between two random variables. The most common correlation ... Read Full Answer >>
  5. How do you calculate variance in Excel?

    To calculate statistical variance in Microsoft Excel, use the built-in Excel function VAR. Given a set of numbers value1 ... Read Full Answer >>
  6. What's the difference between a confidence level and a confidence interval in Value ...

    The value at risk (VaR) uses both the confidence level and confidence interval. A risk manager uses the VaR to monitor and ... Read Full Answer >>
Related Articles
  1. Active Trading

    How To Survive The Trading Game

    Gain insight into how a trader/programmer approaches the task of designing a trading system.
  2. Trading Systems & Software

    Trading Systems Coding

    Automate your trades by translating your strategy into a language your computer can implement in this hands-free approach to investing.
  3. Trading Systems & Software

    Basics Of Trading Systems

    A trading system can save time and take the emotion out of trading, but adopting one takes skill and resources - learn more here.
  4. Trading Systems & Software

    Neural Networks: Forecasting Profits

    Take a look at the algorithmic approach to technical trading - you may never go back!
  5. Fundamental Analysis

    Explaining Expected Return

    The expected return is a tool used to determine whether or not an investment has a positive or negative average net outcome.
  6. Fundamental Analysis

    Explaining the Geometric Mean

    The average of a set of products, the calculation of which is commonly used to determine the performance results of an investment or portfolio.
  7. Investing

    The Labor Market Recovery’s Missing Ingredient

    Job creation is running at the fastest pace since the 90s, and there is some evidence that wage growth is finally starting to accelerate, albeit modestly.
  8. Charts & Patterns

    Why These May Be the Top 4 Growth Stocks of 2015

    These four stocks have high upside potential in 2015.
  9. Chart Advisor

    Interested in Growth Stocks? See These 4 ETFs

    Given the rise in popularity of growth ETFs, there are several interesting growth stock choices for investors.
  10. Chart Advisor

    Watch Out For Falling Copper Prices

    Commodity traders have been turning their attention toward copper prices over the past several weeks.

You May Also Like

Hot Definitions
  1. Fixed-Income Arbitrage

    An investment strategy that attempts to profit from arbitrage opportunities in interest rate securities. When using a fixed-income ...
  2. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  3. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  4. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  5. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  6. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
Trading Center