August 2002 Newsletter

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I. Fuzzy Pattern Recognition Article

Watch for an article in the September issue of Technical Analysis of Stocks and Commodities by our own Marge Sherald on Fuzzy Pattern Recognition. Marge explains the technology and provides some examples, which of course will be downloadable from www.ward.net. If you want your own copy of the add-on to work along with Marge, take a look at the sale in item III.

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II. Featured Product – back to school with NeuroShell 2

NeuroShell 2 succeeded the very successful DOS based NeuroShell 1. It debuted in 1993, and in spite of our newer products, it is still selling strongly. We believe there are several reasons for the longevity of this product:

1. NeuroShell 2 embodies technology that is still being taught in graduate schools across the world. In fact, many of these schools actually use NeuroShell 2.

2. It has 16 different neural net paradigms/architectures, and most of them are variations of the venerable backpropagation. However, it also includes General Regression Neural Nets (GRNN), Probabilistic Neural Nets (PNN), Kohonen Self Organizing Maps, and the Group Method of Data Handling (GMDH – uses a regression analysis based evolutionary model, often called a Polynomial Net). Each of these comes in several “flavors”. Most of the algorithms are fully documented in the literature.

3. Teaching professors love NeuroShell 2 because all of the nets have so many parameters that can be adjusted. It is the ultimate neural net play toy that can keep you busy for hours every day. It can show you the weights changing and even export source code for the nets in C, BASIC, and a generic formula language. When we attempt to convince professors to teach the newer products instead of NeuroShell 2 we’ve often heard “If I do that I can’t make the course last the whole semester”.

4. Research professors love it because the literature is filled with so many papers done in the past with NeuroShell 2.

5. Included in the package is a 3D graphics add-on in which you can graphically display one variable (usually the net output) as a function of two others (usually the inputs that contribute the most to the model).

We also sold hundreds, maybe thousands of copies of NeuroShell 2 to market traders in the years before the NeuroShell Trader Professional became available, and there is even an indicator optimizer in the package. Therefore, we made sure the NeuroShell Trader Professional and DayTrader Professional could fire networks made with NeuroShell 2.

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III. SALE – It’s hot outside, but the market’s not!

Order by August 15th and Save 15% on all NeuroShell Trader Products! You don’t have much time left.

With the current state of the economy and the market near the levels of five years ago, it is clear that the trading rules of old no longer apply. Market choices are no longer clear cut – long term investing may be just as risky as trading. The NeuroShell Trader can help you test and develop your trading strategy before risking your capital.

To take advantage of this offer, you must mention the sale when you place your order.

This offer cannot be combined with other promotions.

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IV. Leaks – opinion from CEO Steve Ward

In the last two newsletters I have editorialized about how it isn’t your father’s financial market anymore, and investors had better learn about trading and market timing. I’m now flattered to see that MSNBC has picked up my thoughts:

** Should you try to time the market? **
With adherents of “buy-and-hold” investing still wincing from the recent raging bear market, the idea of “market timing” is winning renewed attention.
http://www.msnbc.com/modules/exports/ct_email.asp?/news/787060.asp

Someone must be leaking this newsletter to Gates and Brokaw!

Speaking of leaking, I’m going to break a long tradition at Ward Systems and leak some information about NeuroShell Trader 4.0. In return I ask that nobody hold us accountable if some of the leaks turn out to be false. No matter how hard we whip our programmers, some things we ask them to do can’t be done without the complete cooperation of third parties. I hope I never get a call or email from someone that starts out “You promised that in release 4.0…” Also please don’t call and ask more questions – this is all we can tell you now. What follows is not a comprehensive list.

You may not agree, but we think our biggest problem with NeuroShell is that we have so much in it that nobody has ever claimed to know it all, and if they ever do I won’t believe them. It overwhelms new users. That’s not a big problem for you power users, but if we only depended on power users, we’d be out of business. So we have to make the package easier to use, and our solution is to turn a lot of features into options that default off. That way we can hide things from new users so they don’t get overwhelmed. Also, old users can hide things they never want to use, making their work more streamlined.

We haven’t neglected TradeStation all this time; they are just one of the third parties. We hope the new release will sport transfer of data between TS and NST charts for intraday as well as end of day. This means you might be able to use TS Pro data if the transfer is fast enough and your bars are big enough.

Another third party is eSignal, but we hope to have that as a data feed option for our DayTrader users.

Now back to the power users. Our programmers promise there will be a data feed API so you guys with programming skills can write interfaces to your other favorite data feeds. We call it the Data Pump.

The alert form has been expanded to include information about trading strategy orders and positions. Order signals will show up in a message box with optional sound.

We have a revised chart module that moves faster, and you can adjust the height of the subcharts. The Prediction Wizard will show the trading signals that occurred during training. You will be able to save predictions and trading strategies for use in other charts, and DayTrader users will be able to see overnight sessions.

There are many more things too, and of course lots of bugs fixed. So when will this be ready? Sometime after the summer.

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V. No more newsletters in the future?

No, we aren’t ending this newsletter. But you will think we did if you change your email address and don’t send us your new one!

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