Neural Networks with R – A Simple Example

In this tutorial a neural network (or Multilayer perceptron depending on naming convention) will be build that is able to take a number and calculate the square root (or as close to as possible). Later tutorials will build upon this to make forcasting / trading models.The R library'neuralnet' will be used to train and build the neural network. There is lots of good literature on neural networks freely available on the internet, a good starting point is the neural network handout by Dr Mark Gayles at the Engineering Department Cambridge University http://mi.eng.cam.ac.uk/ mjfg/local/I10/i10_hand4.pdf, it covers just enough to get an understanding of what a neural network is and what it can do without being too mathematically advanced to overwhelm the reader. The tutorial will produce the neural network shown in the image below. It is going to take a single input (the number that you want square rooting) and produce a single output (the square root of the input).