Greetings
from NeuroDimension!
The World Leader in Neural Network Software
This issue
of the TradingSolutions newsletter highlights the Solution Service, along with
a helpful tip for trading the QQQ.
In this issue you’ll find:
Product
Upgrade Announcement
* TradingSolutions Build 020115
Now Available
Solution
Service Recap
* Using the Identity Function to Trade the
QQQ
Note: You are
receiving this newsletter because you requested to stay informed concerning
information about TradingSolutions from NeuroDimension. If you would like to
stop receiving these newsletters, please see the bottom of this newsletter for
removal instructions.
=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=
TradingSolutions v2.0 Build 020115 is
now available from NeuroDimension. A patch is available to upgrade from
TradingSolutions v2.0 to the current build.
Version 2.0 Build 020115 solves some problems that Solution
Service users have had with accessing the service through proxy connections. If
you have been unable to reach the Solution Service through TradingSolutions,
you are encouraged to try this version. If you have not been encountering
problems accessing the Solution Service, it is not necessary to upgrade from
Version 2.0 Build 011210.
Upgrading to the new build is free. Current customers require no additional activation codes to upgrade to
this new build. Users of the free evaluation version can also upgrade to this
new build. Simply install the upgrade and start enjoying the new features.
Users of AOL 5.0 and earlier: Some people using AOL Version 5.0 have reported having trouble
connecting to the Solution Service through AOL. Upgrading to a more recent
version of AOL has resolved this problem in each case.
For information on upgrading to the
latest version, as well as a complete list of the changes made in each build,
see http://www.tradingsolutions.com/download/updates.html
You can determine the current version
and build of your TradingSolutions installation by selecting About
TradingSolutions from the Help menu.
=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=
TradingSolutions Version 2.0 introduced the Solution
Service, a free service that provides you with daily trading signals and
commentary for a select group of stocks. These models can be used directly as
part of your trading strategy or used as examples of how to generate your own
winning signals.
Here are some of the highlights of these models since their
general introduction in the beginning of November:
BAX: A gain of 26% on 3 trades, compared to 9% Buy/Hold.
TXN: A gain of 24% on 4 trades, compared to -6% Buy/Hold.
NVLS: A gain of 10% on 6 trades, compared to 7% Buy/Hold.
ERTS: A gain of 8% on 4 trades, compared to 2% Buy/Hold.
ACTL: A gain of 7% on 7 trades, compared to 5% Buy/Hold.
For comparison, the S&P 500 increased 4%, the Dow
increased 5%, and the NASDAQ increased 9% during this time.
Three of the other original stocks were recently replaced
with models based on new research, mostly replacing models that had stopped
trading due to new market conditions. The remaining two stocks started out
well, but have lost ground in recent market conditions. Several models dipped
following the recent Intel and J.P. Morgan announcements, but are expected to
regain ground quickly.
To view the Solution Service models and commentary and
analyze the results for yourself, simply press the “Update Solution Service”
button on the TradingSolutions toolbar. The data is updated after each trading
day and the commentary is updated with highlights of things to watch for in
each model.
=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=
Developing a robust neural network model typically takes a
lot of data. For end-of-day models, we generally recommend using five years of
end-of-day data divided into training, cross-validation, and testing ranges. It
is possible to create models using more or less data; however, the five-year
time frame seems to be a good balance between including many different market
conditions and excluding data from older market conditions.
The QQQ is an Exchange Traded Fund (ETF) that trades
against the NASDAQ 100. Introduced in March 1999, it offers the growth
potential of the NASDAQ while reducing the underlying volatility of many of the
component stocks. Since it was introduced relatively recently, it does not have
a lot of data with which to create good models. However, since it trades
against the value of the NASDAQ 100, it is still possible to create models for
the QQQ. Here’s how:
1. Import the data for the NASDAQ 100 over the past 5-6
years. The symbol for this in Prophet is $NDX.
2. Create a model of the NASDAQ 100 that you would like to
trade.
3. Import the available data for the QQQ.
4. Create a new field for the QQQ, select “Calculate a
Value”, and select the Identity function. The identity function copies
the value of another field without making any modifications to it.
5. For the input to the Identity function, select to choose
from the “Entire Portfolio”, then select the model that you created for the
NASDAQ 100. This will copy the value of the signal into the QQQ.
Using this approach, you can train a model on the data for
one symbol and use it on another. This approach could be used for other
relationships, as well. For example, a general model for the Dow Jones
Industrial Average could be created, then applied and analyzed on each of the
underlying stocks. As with other models, it could be used directly, or combined
with specific models using committees or additional neural network models.
Thanks to TradingSolutions user Bill Van Dyke for sharing
this interesting approach to this problem.
=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=
Many TradingSolutions users read Technical Analysis of
Stocks and Commodities (TASC), the Traders’ Magazine. It’s a great way to
trade smarter with detailed information on trading strategies, charting
patterns, indicators, and computerized trading methods. As a free service to
our users, we arrange for the “Traders’ Tips” section of the magazine to
include tips and techniques for implementing many of the indicators found in
the magazine in TradingSolutions.
Each time a tip is included in the magazine, we also include
the implemented functions in the Solution Library on our web site. These
functions can be imported into either the full version or the evaluation
version of TradingSolutions and are completely free. Visit the Solution Library
now at: http://www.tradingsolutions.com/download/solution.html
If you aren’t familiar with Technical Analysis of Stocks
and Commodities, we encourage you to visit their web site at: http://www.traders.com
Neural 101
is a free educational web site on trading stock and futures markets with neural
networks. It includes message areas, links, trading indicators, systems and
scans. The message areas include special forums on building trading systems,
using neural networks, and even discussing tips, tricks, and ideas for using
TradingSolutions.
NeuroDimension
encourages the use of this free resource to foster discussions between people
interested in TradingSolutions. You can visit Neural 101 at http://www.neural101.com. The
TradingSolutions message forum can be located using the “Message Forums” link
from the left-hand menu.
Have an event or product you would like to announce? Contact
us at submissions@nd.com.
=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=
We appreciate your feedback! Please send us your comments or
suggestions concerning this newsletter, our web site, or part of the
NeuroDimension product line. Write to us at: feedback@nd.com
Have questions about TradingSolutions? Send your questions
to: info@tradingsolutions.com
Some mail readers may display an attachment at the bottom of
this newsletter. This is typically caused when the mail reader is set to
display text only. The original, formatted version is sometimes included as an
attachment.
This issue and previous issues of this newsletter are
available on the TradingSolutions web site at: http://www.tradingsolutions.com/center/newsletter.html
If you would prefer not to receive these newsletters or
subsequent product updates from NeuroDimension, please reply to this letter
with the subject heading changed to the word REMOVE.
Thank you again for your support of NeuroDimension products!