INDIVIDUAL LEARNERS

SCHOOL OF ARTIFICIAL INTELLIGENCE

Artificial Intelligence
for Trading
Nanodegree Program Syllabus
Overview
In this program, learners will analyze real data and build financial models for trading. Whether learners want to level up
in finance, obtain new skills in quant trading, or learn the latest AI applications in quantitative finance, this program offers
them the opportunity to gain mastery of valuable data and AI skills. Building a project is one of the best ways to demonstrate
the skills students have learned learned, and each project will contribute to an impressive professional portfolio that will
demonstrate learners newly acquired knowledge of quantitative finance.

Built in collaboration with:

Program information

Estimated Time Skill Level

6 months at 10hrs/week* Intermediate

Prerequisites

A well-prepared learner should have experience programming with Python and familiarity with statistics, linear
algebra, and calculus.

Required Hardware/Software

Learners need access to a computer running OS X or Windows; Python 3.7.

*The length of this program is an estimation of total hours the average student may take to complete all required
coursework, including lecture and project time. If you spend about 5-10 hours per week working through the program, you
should finish within the time provided. Actual hours may vary.

Artificial Intelligence for Trading 2

 Course 1

Course 1: Basic Quantitative Trading

In this course, students will learn about market mechanics and how to generate signals with stocks. The first project is to
develop a momentum trading strategy.

Course Project

Trading with Momentum

In this project, students will learn to implement a momentum trading strategy and test if it has the potential
to be profitable. Learners will work with historical data of a given stock universe and generate a trading
signal based on a momentum indicator. Learners will then compute the signal and produce projected
returns. Finally, learners will perform a statistical test to conclude if there is alpha in the signal.

Lesson 1

Introduction

Lesson 2

Stock Prices

Lesson 3

Market Mechanics

Lesson 4

Data Processing

Artificial Intelligence for Trading 3

Lesson 5

Stock Returns

Lesson 6

Momentum Trading

Course 2

Advanced Quantitative Trading

In this course, learners will get to know the workflow that a quant follows for signal generation, and also learn to apply
advanced quantitative methods in trading.

Course Project

Breakout Strategy
In this project, learners will code and evaluate a breakout signal. Learners will run statistical tests for
normality and to find alpha. Students will also learn to find outliers and evaluate the effect that filtered
outliers could have on their trading signal. Learners will run various scenarios of their model with or without
the outliers and decide if the outliers should be kept or not.

Lesson 1

Quant Workflow

Artificial Intelligence for Trading 4

Lesson 2

Outliers & Filtering Signals

Lesson 3

Regression

Lesson 4

Time Series Modeling

Lesson 5

Volatility

Lesson 6

Pairs Trading
& Mean Reversion

Course 3

Stocks, Indices & ETFs

In this course, students will learn about portfolio optimization, and financial securities formed by stocks such as market
indices, vanilla ETFs, and smart beta ETFs.

Artificial Intelligence for Trading 5

 Course Project

Smart Beta & Portfolio Optimization

In this project, learners will create two portfolios utilizing smart beta methodology and optimization.
Learners will evaluate the performance of the portfolios by calculating tracking errors. Learners will also
calculate the turnover of their portfolio and find the best timing to rebalance. Learners will come up with
the portfolio weights by analyzing fundamental data and by quadratic programming.

Lesson 1

Stocks, Indices & Funds

Lesson 2

ETFs

Lesson 3

Portfolio Risk & Return

Lesson 4

Portfolio Optimization

Artificial Intelligence for Trading 6

 Course 4

Factor Investing & Alpha Research

In this course, you will learn about alpha factors and risk factors, and construct a portfolio with advanced portfolio
optimization techniques.

Course Project

Multi-Factor Model
In this project, learners will research and generate multiple alpha factors. Then they will apply various
techniques to evaluate the performance of their alpha factors and learn to pick the best ones for their
portfolio. Learners will formulate an advanced portfolio optimization problem by working with constraints
such as risk models, leverage, market neutrality and limits on factor exposures.

Lesson 1

Factors Models of Returns

Lesson 2

Risk Factor Models

Lesson 3

Alpha Factors

Lesson 4

Advanced Portfolio Optimization

with Risk & Alpha Factors Models

Artificial Intelligence for Trading 7

 Course 5

Sentiment Analysis with Natural Language

Processing
In this course, students will learn the fundamentals of text processing and use them to analyze corporate filings and generate
sentiment-based trading signals.

Course Project

Sentiment Analysis using NLP

In this project, learners will apply natural language processing on corporate filings, such as 10Q and 10K
statements, from cleaning data and text processing, to feature extraction and modeling. Learners will utilize
bag-of-words and TF-IDF to generate company-specific sentiments. Based on the sentiments, learners will
decide which company to invest in and the optimal time to buy or sell.

Lesson 1

Intro to Natural Language Processing

Lesson 2

Text Processing

Lesson 3

Feature Extraction

Artificial Intelligence for Trading 8

Lesson 4

Financial Statements

Lesson 5

Basic NLP Analysis

Course 6

Advanced Natural Language

Processing with Deep Learning
In this course, learners will get to know how deep learning is applied in quantitative analysis and get to use recurrent neural
networks (RNN) and long short-term memory networks (LSTM) to generate trading signals.

Course Project

Sentiment Analysis with Neural Networks

In this project, learners will build deep neural networks to process and interpret news data. They will also play
with different ways of embedding words into vectors. Learners will construct and train LSTM networks for
sentiment classification. Learners will run backtests and apply the models to news data for signal generation.

Lesson 1

Introduction to Neural Networks

Artificial Intelligence for Trading 9

Lesson 2

Training Neural Networks

Lesson 3

Deep Learning with PyTorch

Lesson 4

Recurrent Neural Networks

Lesson 5

Embeddings & Word2Vec

Lesson 6

Sentiment Prediction RNN

Course 7

Combining Multiple Signals

In this course, students will learn about advanced techniques to select and combine the factors that they’ve generated from
both alternative data and market data.

Artificial Intelligence for Trading 10

 Course Project

Combining Signals for Enhanced Alpha

In this project, learners will combine signals on a random forest for enhanced alpha. While implementing
this, learners will have to solve the problem of overlapping samples. For the dataset, we’ll be using the end
of day from Quotemedia and sector data from Sharadar.

Lesson 1

Overview

Lesson 2

Decision Trees

Lesson 3

Model Testing & Evaluation

Lesson 4

Random Forests

Lesson 5

Feature Engineering

Lesson 6

Overlapping Labels

Lesson 7

Feature Importance

Artificial Intelligence for Trading 11

 Course 8

Simulating Trades with Historical Data

In this project, learners will build a fairly realistic backtester that uses the Barra data. The backtester will perform portfolio
optimization that includes transaction costs, and learners will implement it with computational efficiency in mind, to allow
for a reasonably fast backtest. Learners will also use performance attribution to identify the major rivers of their portfolio’s
profit-and-loss (PnL). Learners will have the option to modify and customize the backtest as well.

Course Project

Backtesting
In this project, learners will combine signals on a random forest for enhanced alpha. While implementing
this, learners will have to solve the problem of overlapping samples. For the dataset, we’ll be using the end
of day from Quotemedia and sector data from Sharadar.

Lesson 1

Intro to Backtesting

Lesson 2

Optimization with Transaction Costs

Lesson 3

Attribution

Artificial Intelligence for Trading 12

Meet your instructors.

Cindy Lin
Curriculum Lead

Cindy is a quantitative analyst with experience working for financial institutions such as Bank of
America, Merrill Lynch, Morgan Stanley, and Ping An Securities. She has an MS in computational
finance from Carnegie Mellon University.

Brok Bucholtz
Instructor

Brok has more than 5 years of software engineering experience from companies like
Optimal Blue. Brok has built Udacity projects for the Self-Driving Car, Deep Learning, and AI
Nanodegree programs.

Eddy Shyu
Instructor

Eddy has worked at BlackRock, Thomson Reuters, and Morgan Stanley, and has an MS in
financial engineering from HEC Lausanne. Eddy taught data analytics at UC Berkeley and
contributed to Udacity’s Self-Driving Car program.

Luis Serrano
Instructor

Luis was formerly a machine learning Engineer at Google. He holds a PhD in mathematics from
the University of Michigan, and a postdoctoral fellowship at the University of Quebec at Montreal.

Artificial Intelligence for Trading 13

Arpan Chakraborty
Instructor

Arpan is a computer scientist with a PhD from North Carolina State University. He teaches at
Georgia Tech (within the Master of Computer Science program), and is a coauthor of the book
Practical Graph Mining with R.

Parnian Barekatain
Instructor

Parnian is a self-taught AI programmer and researcher. Previously, she interned at OpenAI on

multi-agent reinforcement learning and organized the first OpenAI hackathon. She also runs a
ShannonLabs fellowship to support the next generation of independent researchers.

Elizabeth Otto Hamel

Instructor

Elizabeth received her PhD in applied physics from Stanford University, where she used
optical and analytical techniques to study activity patterns of large ensembles of neurons. She
formerly taught data science at The Data Incubator.

Juan Delgado
Instructor

Juan is a computational physicist with a master’s in astronomy. He is finishing his PhD in

biophysics. He previously worked at NASA developing space instruments and writing software to
analyze large amounts of scientific data using machine learning techniques.

Artificial Intelligence for Trading 14

Cezanne Camacho
Curriculum Lead

Cezanne is a machine learning educator with a master’s in electrical engineering from Stanford
University. As a former researcher in genomics and biomedical imaging, she’s applied machine
learning to medical diagnostic applications.

Mat Leonard
Instructor

Mat is a former physicist, research neuroscientist, and data scientist. He completed his PhD
and postdoctoral fellowship at the University of California, Berkeley.

Artificial Intelligence for Trading 15

Udacity’s learning
experience

Hands-on Projects Quizzes

Open-ended, experiential projects are designed Auto-graded quizzes strengthen comprehension.
to reflect actual workplace challenges. They aren’t Learners can return to lessons at any time during
just multiple choice questions or step-by-step the course to refresh concepts.
guides, but instead require critical thinking.

Knowledge Custom Study Plans

Find answers to your questions with Knowledge, Create a personalized study plan that fits your
our proprietary wiki. Search questions asked by individual needs. Utilize this plan to keep track of
other students, connect with technical mentors, movement toward your overall goal.
and discover how to solve the challenges that
you encounter.

Workspaces Progress Tracker

See your code in action. Check the output and Take advantage of milestone reminders to stay
quality of your code by running it on interactive on schedule and complete your program.
workspaces that are integrated into the platform.

Artificial Intelligence for Trading 16

Our proven approach for building
job-ready digital skills.
Experienced Project Reviewers

Verify skills mastery.

• Personalized project feedback and critique includes line-by-line code review from
skilled practitioners with an average turnaround time of 1.1 hours.

• Project review cycle creates a feedback loop with multiple opportunities for
improvement—until the concept is mastered.

• Project reviewers leverage industry best practices and provide pro tips.

Technical Mentor Support

24/7 support unblocks learning.

• Learning accelerates as skilled mentors identify areas of achievement and potential
for growth.

• Unlimited access to mentors means help arrives when it’s needed most.

• 2 hr or less average question response time assures that skills development stays on track.

Personal Career Services

Empower job-readiness.
• Access to a Github portfolio review that can give you an edge by highlighting your
strengths, and demonstrating your value to employers.*

• Get help optimizing your LinkedIn and establishing your personal brand so your profile
ranks higher in searches by recruiters and hiring managers.

Mentor Network

Highly vetted for effectiveness.

• Mentors must complete a 5-step hiring process to join Udacity’s selective network.

• After passing an objective and situational assessment, mentors must demonstrate

communication and behavioral fit for a mentorship role.

• Mentors work across more than 30 different industries and often complete a Nanodegree
program themselves.

*Applies to select Nanodegree programs only.

Artificial Intelligence for Trading 17

Learn more at
www.udacity.com/online-learning-for-individuals →

12.02.22 | V1.0