ABSTRACT

Stock market prediction is the act of trying to determine the future value of a company stock or other
financial instrument traded on a financial exchange. The successful prediction of a stock's future
price will maximize investor’s gains.

In this project we attempt to implement a Machine Learning algorithm that will approach to predict
stock market prices. Here the administrator trains the learning algorithm with a bulk data set of share
prices of different stocks. A user needs to register himself/ herself into the application if he is a new
user. If he is a registered user, then he needs to authenticate himself to enter the system.

A user can search the stock name of a company, on which he wants to invest. Then with the help of
the trained algorithm, which the administrator had trained before, we can predict the value of the
share price of that company and if the user is satisfied, he can invest on that company. The user can
see the status of his purchased shares and if not satisfied, he has a freedom of selling his share.

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 INTRODUCTION

Stock market is a place where shares of public listed companies are traded. The primary market is
where companies float shares to the general public in an initial public offering to raise the capital
money. In stock market, one investor buys share from another investor for the prevailing market
price or at whatever price both the buyer and seller agree upon. The stock markets or stock
exchanges are regulated by Regulatory Authority, Security and Exchange Board of India(SEBI). A
stock exchange facilitates brokers to trade company stocks and other securities. A stock may be
bought or sold only if it is listed on an exchange. So it is the meeting place of stock buyers and
sellers. India’s premiere stock exchanges are the Bombay Stock Exchange(BSE) and National Stock
Exchange(NSE).

There are some stages in entering a company into stock exchanges. First, a company gets listed in the
primary market through IPO. Once listed, the stocks issued can be traded by the investor. Here
buyers and sellers gather to conduct transactions to make profits or losses. Stock brokers and firms or
entities registered with the stock exchanges. They act as intermediary between you and stock
exchanges. However, there are plenty of investors. It is impossible for all to meet at one place and
conduct their trades. This is where stock brokers and firms plays an important role. Once you place
an order to buy a particular share at a price, it is processed through your broker at the stock
exchange. There are multiple parties involved in this.

Investing on a company’s share in the stock exchange includes a lot of difficulties. One of the major
problems that an investor may face during investing is lack of knowledge about the company and
stock market. Another important consideration here is that the investor may correctly predict the
share price or may not. If he can predict the share price correctly the he can maximize his gains and
drive into profits. Generally many cases investors may not predict the leaps and bounds of a share
price. So ultimately he may bag a lot of losses in investing on a share. Luck factor also plays a major
role in predicting the price of a share. Lack of knowledge also includes the investor do not know
about the company’s history or how to maximize his profits or how to make profits, weather
conditions also plays a role. Based on all these factors, the investor may get profit or loss.

Stock market prediction is the act of trying to determine the future value of a company stock or other
financial instrument traded on a financial exchange. The successful prediction of a stock's future
price will maximize investor’s gains.

Prediction in stock market has been a hot research area for many years. If any system which can
consistently predict the trends of the stock market be developed, it would make the owner and the
users of the system wealthy. Stock market follows a random walk, which implies that the best
prediction you can have about tomorrow’s value is today’s value. But determining stock pricing is
very difficult because of the market situation that needs an accurate algorithm.

Introducing an intelligent computer application into stock price prediction will reduce the confusion
and conservative options for many investors and market participants. It will guide the investors in
overcoming the uncertainty and imprecision in predicting the stock prices many times. We do this

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with the help of Machine Learning which uses Particle Sworn Optimisation(PSO)algorithm as a
regression model, which make the users to search for a share and invest on that particular share using
online banking. This helps the investors to predict the share price fluctuations and drive in
maximizing their profits.

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 2. SOFTWARE REQUIREMENT SPECIFICATION
2.1 INTRODUCTION:
Developing an application for analyzing and predicting stock market prices is a basic tool aimed at
increasing the rate of investors’ interest in stock markets.

2.1.1 PURPOSE OF THE SYSTEM:

The purpose of the system is mainly to reduce the inconsistency and confusion about fluctuations in
shares of different companies in the stock market. This system provides service facility to predict the
share value of a particular company, on which the investor need to invest.

2.1.2 SCOPE OF THE SYSTEM:

 There are Two types of users-Admin, User

 There are mainly four types of Modules
Authentication:
Module which lets the user to authenticate himself.
View Predicted Outcome:
Module which will let the user to see the predicted outcome of a stock what he wanted.
Investing on a share:
Module which allows the user to invest on a share of his interest.
Selling a share:
Module which allows the user to sell his share if not interested or if not satisfied.
 The user can search any company’s share based on his interest.
 The Admin will need to update the data set and keep it up to date.

2.2 REQUIREMENTS
2.2.1 FUNCTIONAL REQUIREMENTS:
Functional requirements are the requirements which deals with the operational requirements of the
system and the requirements that are requested by the user.
1. Admin manages the entire application.
2. Admin prevents unauthorised access of database and keeps the database up to date by
inserting new stock details..
3. User needs to register himself to use the system.
4. If the user is a registered user, then he needs to authenticate himself against the system.
5. User may search and view any share, based on his interest to predict the status of that share.
6. If the user is satisfied with the prediction of that stock value, then he can make a payment to
buy that stock’s share.
7. User has freedom to sell his purchased share by seeing the status of that share.

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2.2.2 NONFUNCTIONAL REQUIREMENTS:

Hardware Requirements:
 Processor: : Intel dual core processor
 RAM : 1GB
 Disk Space : 32GB

Software Requirements:

 Software : Anaconda(Jupytor Notebook)

 Programming Language : Python
 UML : Rational rose
 Operating system : Windows XP, Windows 7,Windows 8
 DBMS : Microsoft Excel

2.2.3 USECASE DIAGRAM:

Use case diagrams are usually referred to as behaviour diagrams used to describe a set
of actions (use cases) that some system or systems (subject) should or can perform in
collaboration with one or more external users of the system (actors).
2.2.3.1Identification of Actors:
Actors represent system users. They help delimit the system and give a clearer picture
of what the system should do. It is important to note that an actor interacts with, but has no
control over the use cases.
An actor is someone or something that:
• Interacts with or uses the system.
• Provides input to and receives information from the system.
• Is external to the system and has no control over the use cases.
2.2.3.2 Identification of Use cases:
In its simplest form, a use case can be described as a specific way of using the system
from a user’s (actors) perspective.
A more detailed description might characterize a use case as:
• A pattern of behaviour the system exhibits.
• A sequence of related transactions performed by an actor in the system.
• Delivering something of value to the actor.

Use cases provide a means to:

• Capture system requirements.
• Communicate with the end users and domain experts.
• Test the system.

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 Use cases are the best discovered by examining the actors and defining what the actor
will be do with the system. Since all the needs of a system typically cannot be covered in one
use case, it is usual to have a collection of use case. Together this use case collection specifies
all the ways of using the system.

Insert stock details

Admin Registration

Authentication

Search for a Stock

User View prediction

utcome
Buy a share

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Sell purchased
share

View status of a
purchased share

Figure:1.1

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USE CASE: Insert Stock details
Actor Actions System Responds
1 .Collect data
2. Click ‘Insert stock details’ option
3. Dialog box appears
4. Enter stock related details
5. Enter ‘Submit’
6. Dialog box disappears

USE CASE: Registration

Actor Actions System Responds
1. Click on ‘New user’ option
2. Dialog box appears
3. Enter user details
4. Click on ‘Submit’ button
5. Dialog box disappears

USE CASE: Authentication

Actor Actions System Responds
1. Click on ‘Login’ button
2. Dialog box appears
3. Enter username and password
4. Click on ‘Submit’ button
5. Dialog box disappears

USE CASE: Search for a stock

Actor Actions System Responds
1 .Click on ‘Search stocks’ button
2. Dialog box appears
3. Enter a valid stock name
4. Click on ‘Search’ button
5. Dialog box disappears

USE CASE: View prediction

Actor Actions System Responds
1. After searching for a valid stock,
click on ‘Predict Outcome’ button
2. System displays the predicted
outcome .

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USE CASE: Buy a share
Actor Actions System Responds
1. Click on ‘Invest’ button
2. Opens a form to enter details
3. Enter banking details and number of
shares he want to buy
4. Click on ‘Proceed’ button
5. Completes the transaction and
shows conformation message

USE CASE: Sell purchased share

Actor Actions System Responds
1. Click on ‘Sell’ button
2. Opens a form to enter details
3. Enter banking details and number of
shares he want to sell
4. Click on ‘Proceed’ button
5. Completes the transaction and
shows conformation message

USE CASE: View status of a purchased share

Actor Actions System Responds
1. Select a purchased share
2. Click on ‘View status’ button.
3. System displays the status of
that particular share.