Tutorial: Creating Profitable Models

Introduction

Create and Apply a Trading Solution

Work with Groups of Data

Compare Multiple Stocks

Creating Profitable Models

Congratulations!

Congratulations, you have now completed the introductory tutorials. At this point, you should feel reasonably comfortable with the following concepts::

·      Importing Data from Files

·      Creating Fields for models, financial indicators, and other values

·      The Optimal Signal

·      Creating a basic model of the optimal signal

·      Experimenting with previously created models

·      The Primary Signal

·      Analyzing signals for profitability

·      Specifying a Primary Signal from among several signals for a stock

·      Viewing the current value of the Primary Signal in the Portfolio View

·      Working with Multiple Stocks

·      Creating and applying trading solutions

·      Creating models and other fields for entire groups

·      Comparing the analysis of the primary signals of multiple stocks in the Portfolio View

In addition, if you completed the optional activities, you should also feel reasonable comfortable with the following concepts:

·      Displaying Data in a Chart

·      Displaying Data in a Spreadsheet

Ä    Note: If you do not feel comfortable with these concepts, you may want to experiment with the sample data and then return to these tutorials for any concepts that still need clarification.

Creating Profitable Models

With this wide range of tools, you may still be wondering how to approach creating profitable models (and making money) with TradingSolutions. Here are some suggestions as to how to continue.

1.    Begin by following the Solution Service. The signals and commentary provided with the Solution Service provide an excellent starting point for seeing how models can be used on a day-to-day basis.

Ä    Note: Remember, the Solution Service is updated each evening to provide you with information about what you could trade at the next open.

2.    Look at previously created models for examples of financial indicators people are using to create profitable models.

Ä    Note: Good sources of existing models are the Solution Service, the TradingSolutions web site, and TradingSolutions users groups.

3.    Instead of concentrating on individual stocks, try applying approaches to entire groups of stocks and working on improving the models that show some potential.

:    Example: Try importing the S&P 100 or NASDAQ 100 into a group and apply trading solutions to the entire group. Use the Primary Signal and display fields to identify the best performers and concentrate on trading or improving those.

Ä    Note: Don’t get frustrated if you can’t model an individual stock. If you are having trouble creating profitable models for a particular stock, that stock may be very difficult to model.

4.    Don’t discount your own knowledge of trading when selecting inputs for models. If you have previous experience in technical analysis, what financial indicators would your normally look at? When you look at a chart of the price and the optimal signal, what information might lead you to trade around when the optimal signal trades?

Ä    Note: Magazines and websites can be excellent sources of additional information concerning technical analysis and financial indicators.

5.    Use correlation analysis to identify potential inputs for your models. Correlation analysis will be introduced in the Advanced Features tutorials.

_    Continue to the next tutorial.

Ä    Using Advanced Features