In this issue:
I. Optimizing Pricing Strategy
II. Commentary by Steve Ward
III. Direct from the Forum
IV. How to get continuous futures data with Prophet.net
V. Interested in learning about Exchange Traded Funds?
VI. One way to stop this newsletter
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I. Optimizing Product Pricing Strategy
Dr. James Dauer, professor of computer science and applied mathematics at Elmhurst College in Illinois, has developed a unique and highly effective methodology for product pricing using GeneHunter. The model incorporates pricing guidelines for each product that allow the user to set intra-product line price ratios, max/min limits, and volume discounts. In addition, built-in price elasticity curves dynamically adjust product volumes as a function of the changing prices to reflect expected demand at each price level. The model then selects that combination of prices across all products yielding the highest profit — an intractable task using any traditional optimization technique. In addition, the model estimates the unit volume for each item based on the resultant optimal pricing strategy. Application areas include: all “big box” retailers, restaurants, catalog sales, or any situation involving a myriad of pricing combinations across hundreds, or even thousands, of products. It is ideal for estimating the impact of price changes on product demand. Dr. Dauer’s paper entitled, “Survival of the (Pricing) Fittest” recently published in the Journal of Pricing Professionals, illustrated how a fictitious fast-food chain was able to increase profit by $4.5 million across 100 stores using his model. The actual model formulation is proprietary. Dr. Dauer may be contacted at jimd@elmhurst.edu, or (630) 617-3124, for further information.
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II. Commentary by Steve Ward
1. First I have to apologize for not getting a newsletter out in July. Things kind of got away from me with so many of our staff out at various times for vacations.
2. Now, for your amusement is a typical conversation I have a lot with TradeStation users calling for info regarding TradeStation’s Easy Language(TM):
TS User: I have quite a few indicators in TradeStation – can I convert them into NeuroShell?
Me: Are they standard indicators or something you did in Easy Language?
TS User: No, I did them in Easy Language
Me: Well, if your indicators are based upon other standard indicators, then our “point and click” language in the Indicator Wizard should work nicely for you.
TS User: No, they’re more complicated than that
Me: In that case you can program them in standard languages like BASIC
TS User: But I’m not a programmer
Me: Yes you are! Easy Language is programming. If you are building complex indicators in Easy Language, then you are programming, whether you realize it or not. True, Easy makes accessing price data easier in several ways, but it is still programming if you are doing anything involved
TS User: Ok, but I read that I have to make DLLs. I have no idea what a DLL is.
Me: Don’t let the intimidating name Dynamic Link Library scare you off. When you make a DLL for NeuroShell, you are basically building a function call, where you pass some inputs and some output from them shows up on the chart. It’s like building a TradeStation Indicator. There’s no worry about reading keyboards, disks, or formatting screens.
TS User: I programmed BASIC in school – how much more will I need to learn?
Me: Not much really. BASIC is pretty much BASIC everywhere as long as you aren’t talking about formatting screens.
TS User: Is BASIC built into NeuroShell?
Me: No, but you can get a decent compiler for $79 – visit www.pyxia.com
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III. Direct from the Forum
The NeuroShell Trader forum has been pretty busy in the last few weeks, complete with tutorials and assistance from some of our brightest users. You should take a look at the sharing going on. www.ward.net
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IV. How to get continuous futures data with Prophet.net
Prophet.net is now offering continuous futures data for daily bars on most contracts. They offer both price adjusted and non-adjusted data streams. Basically, there are new symbol names for the continuous data streams. Take the symbol of the contract you want to make continuous, for example ESM5 for E-Mini SP 500 Stock Index (June 2005), and replace the last two places with 1600 for the adjusted data (ES1600) or 1700 for the non-adjusted data (ES1700).
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V. Interested in learning about Exchange Traded Funds?
Be sure to check out the September 2005 issue of Technical Analysis of Stocks and Commodities for Paolo Pezzutti’s article entitled “A Short Guide to Exchange-Traded Funds.” He describes ETFs as baskets of securities traded on an exchange that can be bought and sold at any time during the day and carry specific tax advantages. ETFs you’ve probably heard of include SPY, the Standard & Poor’s 500 Index; QQQQ, the NASDAQ-100 Index Tracking Stock and DIA, the Diamonds Trust that tracks the Dow Jones Industrial Average. There are also a large number of ETFs that track specific sectors.
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VI. One way to stop this newsletter from coming
It is really easy. Just change your email address and don’t tell us.
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