A computing platform for pairs-trading online implementation via a blended Kalman-HMM filtering approach

H3O-LGBM: hybrid Harris hawk optimization based light gradient boosting machine model for real-time trading

The gross domestic product (GDP) of a country is mainly dependent on its trade and external sector which improves the country's income. According to FY2021-2022, India's nominal GDP is estimated to be 3.12 trillion US dollars. Overall exports and imports have a year-over-year increase of 49.6% and 68% respectively. Machine learning techniques have the potential to improve India's Current gross value by up to 15% by the year 2035. The integration of data, Technology, and talent helps to create intelligent models that enhance artificial intelligence growth. This paper presents an optimized light gradient boosting machine (Light GBM) model using the hybrid Harris hawk optimization (H3O) algorithm for trade forecasting. The overfitting problem in the conventional Harris Hawk Optimization is overcome using the exclusive feature bundling (EFB) and the gradient-based one-side sampling (GOSS) methodologies. The H3O optimization algorithm offers fast convergence by optimizing different lightGBM parameters such as a number of training iterations, maximum depth, minimal data in the leaf, etc. To improve the performance, one step further, the residual errors of the optimized lightGBM model are corrected using the Markov Chain model. The main aim of the optimized lightGBM model is to extract the crucial input values of certain variables such as imports and exports of goods and services, service trade, and merchandise trade and predict the price movement decision. The proposed model identifies the interrelationship with the external market and future market growth along with analyzing the variation in market conditions. The prediction decision is mainly to hold, but, or sell the stocks. When evaluated using the precious metal price forecast and stock market datasets, the proposed methodology shows that the hybrid approach can enhance the prediction performance. The results show that the input parameters were efficient in predicting the economic growth regarding the Intermarket trading system (ITS) and services with higher accuracy.