Machine Learning Applications in Algorithmic Trading: A Comprehensive Systematic Review

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Arash Salehpour 1,* Karim Samadzamini 2

1. Department of Computer Engineering, Faculty of Electrical and Computer Engineering, University of Tabriz, Tabriz, Iran

2. Department of Computer Engineering, University College of Nabi Akram, 51839-18993, Tabriz, Iran

* Corresponding author.


Received: 24 Jul. 2023 / Revised: 23 Aug. 2023 / Accepted: 8 Sep. 2023 / Published: 8 Dec. 2023

Index Terms

Musculoskeletal disorders, MSDs Ergonomic, Back Pain, Neck Pain, Students’ posture, RULA, Health, MUET


This paper reviews recent advancements in machine learning (ML) driven automated trading systems (ATS). ATS has progressed from simple rule-based systems to sophisticated ML models like deep reinforcement learning, deep learning, and Q-learning that can adapt to evolving markets. These techniques have been successfully applied across various financial instruments to optimize trading strategies, forecast prices, and enhance profits. The literature indicates that ML improves ATS performance over conventional methods by identifying intricate patterns and relationships in data. However, risks like overfitting, instability, and low interpretability exist. Techniques to mitigate these limitations include cross-validation, careful model management, and utilizing more transparent algorithms. Although challenges remain, ML creates valuable opportunities for ATS via alternative data sources, advanced feature engineering, optimized adaptive strategies, and holistic market modelling. While research shows ML improves market quality through increased liquidity and efficiency, heightened volatility needs further analysis. Promising future research directions include leveraging innovations in deep learning, reinforcement learning, sentiment analysis, and hybrid systems. More work is also needed on evaluating different techniques systematically. Overall, the progress in ML-driven ATS contributes significantly to the field, but judicious application and balanced regulations are required to address risks. Further advancements in ML will enable more capable, nuanced, and profitable algorithmic trading.

Cite This Paper

Arash Salehpour, Karim Samadzamini, "Machine Learning Applications in Algorithmic Trading: A Comprehensive Systematic Review", International Journal of Education and Management Engineering (IJEME), Vol.13, No.6, pp. 41-53, 2023. DOI:10.5815/ijeme.2023.06.05


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