Greetings
from NeuroDimension!
The World Leader in Neural Network Software
This issue
of the TradingSolutions newsletter highlights the availability of a new build,
along with a results recap and example from the Solution Service.
In this issue you’ll find:
Product
Upgrade Announcement
* TradingSolutions Build 020309
Now Available
Solution
Service Recap
* Using Neural Networks as Committees
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.
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TradingSolutions v2.0 Build 020309 is
now available from NeuroDimension. This new build fixes minor problems found in
previous builds. A patch is available to upgrade from any previous build of
TradingSolutions v2.0 to the current build.
Version 2.0 Build 020309 solves several small problems
encountered by TradingSolutions users, including enhancements to file importing
and improved Windows XP support. In addition, the percent change in price has
been added to the Information View and optional reminders have been added for
updating the Solution Service.
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.
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.
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TradingSolutions Version 2.0 includes 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.
The Novellus Systems model was replaced with an
improved model in the middle of February. Based on historical backtesting, the
one-year historical performance for the new model is a profit of 306% over 38
trades with 89% winners. The average trade lasted 5 trading days and generated
a profit of 4.2%.
The Texas Instruments model has also
been doing very well. Since the introduction of the Solution Service in
November 2001, it has produced a profit of 49% over 8 trades with 87% winners.
The average trade lasted 4 trading days and generated a profit of 5.3%. For
comparison, during this time the stock increased 15%, the S&P 500 increased
4%, and the NASDAQ increased 1%.
The recent market rally has produced mixed results
for the Solution Service. Several of the models were long on March 1, producing
large gains. These included one-day gains of 14% for Novellus, 5% for Actel,
and 4% for Electronic Arts. These rapid changes in price generated several short signals that
produced some initial losses as the rally continued, but then turned into
profits as the market reversed on Tuesday. The Solution Service commentary
indicated the short-term losses were a possibility to be aware of due to the
broad market nature of these moves.
Update Today! 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.
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In the process of creating effective trading signals, you may
often come up with multiple models that perform well at different times. For
example, you may have one model that performs well during bull markets and
another model that performs well when the market is relatively flat.
TradingSolutions includes several ways you can combine multiple models into one
successful signal.
Combining Multiple Signals
One method is to combine these signals in a committee,
assigning votes to the various models to adjust their effect on the overall
signal. This is useful for maintaining a constant balance between two or more
signals. However, there may be times when you want a more flexible weighting
between the signals.
A good approach to this flexible weighting is to use a
neural network to determine how to best use the information in these models.
Using this approach, the existing models essentially act as technical
indicators that can be combined with other technical indicators to better
predict an optimal signal. However, this can also be viewed as the neural
network selecting which signal to use at which times.
A Solution Service Example
The Texas Instruments signal included in the Solution
Service is a good example of this approach. As explained in the notes for the
accompanying solution, a first model was created that produces good results.
However, it tends to get stuck in multi-month trades, especially during large
declines. Because of this, a second model was created with a larger date range
that includes an example of one of these declines. This second model handles decreases
better, but does not perform as well as the first model overall.
To combine these two approaches, a third model was created
that uses these two models as inputs. It is also given additional information
about the current trends in the market using the Vertical Horizontal Filter
(VHF). The VHF is a technical indicator that quantifies whether a field is in a
trending or trading phase by analyzing the difference between the highest and
lowest values versus daily fluctuations.
The result of this approach is a model that produces higher
gains with a better winning percentage than either of the underlying models
(both from January 1995 and over the last year).
To further analyze these results or see this approach in
action, be sure to Update the Solution Service in your TradingSolutions
portfolio. Then, examine the trading solution and underlying models for Texas
Instruments.
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KingCAMBO's TrendTimes Magazine
KingCAMBO's TrendTimes Magazine (http://Kingcambo.com/trendtimes) is
a bi-weekly electronic magazine published by real traders, for real traders. It
includes over 90+ pages of content-packed articles covering strategies and
methods from a wide scope of trading perspectives. Instead of concentrating on
hot stocks to watch and analyst research reports, TrendTimes Magazine gives you
real trading strategies you can use.
Through a special arrangement with NeuroDimension,
all TradingSolutions newsletter subscribers may receive a free
one-time copy of the most recent issue of TrendTimes Magazine at: https://www.kingcambo.com/trendtimes/NeuroDimension/030402.pdf
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.
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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
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available on the TradingSolutions web site at: http://www.tradingsolutions.com/center/newsletter.html
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