In the series “The Mathematics Behind” I will explain mathematical concepts behind commonly used technologies. In this post, I will explain the mathematics behind polynomial curve fitting.
First of all, what is polynomial curve fitting and where is it used for? Suppose we are trading on a stock market. The stock price is going up and down (see the figure) and we want to discover patterns in the price chances if any exists. Polynomial curve fitting tries to fit a model (here: a polynomial) on the given datapoints as good as possible.