Inthis paper, we propose to use recurrent reinforcement learning to directly optimize such trading system performance functions, and we compare two different reinforcementlearning methods. The first, Recurrent Reinforcement Learning, uses immediate rewards to train the trading systems, while the second (Q-Learning (Watkins 1989)) approximates discounted future rewards. These methodologies can be applied to optimizing systems designed to trade a single security or to trade portfolios .In addition, we propose a novel value function for risk-adjusted return that enables learning to be done online: the differential Sharpe ratio. Trading system profits depend upon sequences of interdependent decisions, and are thus path-dependent. Optimal trading decisions when the effects of transactions costs, market impact and taxes are included require knowledge of the current system state. In Moody, Wu, Liao & Saffell (1998), we demonstrate that reinforcement learning provides a more elegant and effective means for training trading systems when transaction costs are included, than do more standard supervised approaches.

In previous work [6, 9, 10], we advanced a new technique for direct visual matching of images for the purposes of face recognition and image retrieval, using a probabilistic measure of similarity based primarily on a Bayesian (MAP) analysis of image differences, leadingto a "dual" basis similar to eigenfaces [13]. The performance advantage of this probabilistic matching technique over standard Euclidean nearest-neighbor eigenface matching was recently demonstrated using results from DARPA's 1996 "FERET" face recognition competition, in which this probabilistic matching algorithm was found to be the top performer. We have further developed a simple method of replacing the costly compution of nonlinear (online) Bayesian similarity measures by the relatively inexpensive computation of linear (offline) subspace projections and simple (online) Euclidean norms, thus resulting in a significant computational speedup for implementation with very large image databases as typically encountered in real-world applications.

In 1986, Tanner and Mead [1] implemented an interesting constraint satisfaction circuitfor global motion sensing in aVLSI. We report here a new and improved aVLSI implementation that provides smooth optical flow as well as global motion in a two dimensional visual field. The computation ofoptical flow is an ill-posed problem, which expresses itself as the aperture problem. However, the optical flow can be estimated by the use of regularization methods, in which additional constraints are introduced interms of a global energy functional that must be minimized. We show how the algorithmic constraints of Hom and Schunck [2] on computing smoothoptical flow can be mapped onto the physical constraints of an equivalent electronic network.

We propose a new in-sample cross validation based method (randomized GACV) for choosing smoothing or bandwidth parameters that govern the bias-variance or fit-complexity tradeoff in'soft' classification. Soft classification refersto a learning procedure which estimates the probability that an example with a given attribute vector is in class 1 vs class O. The target for optimizing the the tradeoff is the Kullback-Liebler distance between the estimated probability distribution and the'true' probability distribution,representing knowledge of an infinite population. The method uses a randomized estimate of the trace of a Hessian and mimics cross validation at the cost of a single relearning with perturbed outcome data.

Fraud causes substantial losses to telecommunication carriers.

Computer animation through the numerical simulation of physics-based graphics models offers unsurpassed realism, but it can be computationally demanding.This paper demonstrates the possibility of replacing the numerical simulation of nontrivial dynamic models with a dramatically more efficient "NeuroAnimator" that exploits neural networks. NeuroAnimators areautomatically trained off-line to emulate physical dynamics through the observation of physics-based models in action. Depending onthe model, its neural network emulator can yield physically realistic animation one or two orders of magnitude faster than conventional numericalsimulation. We demonstrate NeuroAnimators for a variety of physics-based models. 1 Introduction Animation based on physical principles has been an influential trend in computer graphics for over a decade (see, e.g., [1, 2, 3]). This is not only due to the unsurpassed realism that physics-based techniques offer.

H3C 3A7 CANADA 2Department of Cognitive and Neural Systems, Boston University Boston, MA 02215 USA Abstract The ARTMAP-FD neural network performs both identification (placing test patterns in classes encountered during training) and familiarity discrimination (judging whether a test pattern belongs to any of the classes encountered during training). The performance ofARTMAP-FD is tested on radar pulse data obtained in the field, and compared to that of the nearest-neighbor-based NEN algorithm and to a k 1 extension of NEN. 1 Introduction The recognition process involves both identification and familiarity discrimination. Consider, for example, a neural network designed to identify aircraft based on their radar reflections and trained on sample reflections from ten types of aircraft A . . . After training, the network should correctly classify radar reflections belonging to the familiar classes A . Familiarity discrimination is also referred to as "novelty detection," a "reject option," and "recognition in partially exposed environments."

Gaussian Processes provide good prior models for spatial data, but can be too smooth. In many physical situations there are discontinuities along bounding surfaces, for example fronts in near-surface wind fields. We describe a modelling method for such a constrained discontinuity and demonstrate how to infer the model parameters in wind fields with MCMC sampling.

This paper presents probabilistic modeling methods to solve the problem of discriminating betweenfive facial orientations with very little labeled data.

A key question in vision is how to represent our knowledge of previously encountered objects to classify new ones. The answer depends on how we determine the similarity of two objects. Similarity tells us how relevant each previously seen object is in determining the category to which a new object belongs.