A series of algorithms that attempt to identify underlying relationships in a set of data by using a process that mimics the way the human brain operates. Neural networks have the ability to adapt to changing input so that the network produces the best possible result without the need to redesign the output criteria.

The concept of neural networks is rapidly increasing in popularity in the area of developing trading systems. At one point in time, it would have seemed impossible to make a system that would be able to adapt to changing markets, but recent developments in technology have now made having these types of systems a reality.