I. Join the Revolution With the NeuroShell DayTrader Professional.
This is the official announcement of the NeuroShell DayTrader Professional (our new “intraday” version of the Trader). Hereinafter, we will just call this product the “DayTrader”.
Overview
This is the premier product for day traders and aspiring day traders. Now you can join the revolution and build systems that give buy and sell signals on 1, 2, 5, 10, 15, 20, 30, and 60 minute bars, as opposed to the daily bars that are in the Trader and Trader Pro. You can watch each tick change the high, low, and close of the last bar on the chart, until the bar is finished and becomes part of your trading system. Use your alerts to wake you up from your nap, if you are one of the few who will be able to sleep while the DayTrader is running!
You are going to need a special real time data feed to use the DayTrader. There are many such feeds available, and we may eventually support more of them, but this first version of the DayTrader only supports one. We could have held up the DayTrader until more data feeds were supported, making more of you happy, but that would take a great deal more time. We elected to release the product with only one feed supported, even though it may not be YOUR feed. If you are willing to use the one we now support, the DayTrader is for you. If you want to join the revolution later when we can support something you like better, you can do that too.
Data Feed
For this, the first version, we are using Lycos-Quote.com (from them you’ll need Qfeed or Qcharts. For info, see www.quote.com). We chose Quote.com because they have historical tick data which we can load from the Internet, and you need historical data to build nets and backtest trading strategies.
In the future, we may add more data services that can supply historical data online. We will look at interfacing with TradeStation’s Global Data Server. We may add also some services which do NOT supply the historical data, which will necessitate that we supply some sort of historical data server of our own.
Currently, we have not built such a server, and in fact, even charts made with Quote.com will require data reloading each time you bring up the chart. This will not be an issue unless you will be one of those who use excessive amounts of data on slow modems. For you, we recommend DSL or cable model Internet feeds. Also, read “Simple Models and Less Data” below.
The bottom line is we are looking, but we are making no promises at this time about any other data feeds or interfaces.
Popular Issues are Now More Amenable to Modeling Technology
One interesting thing about the DayTrader is that it opens a whole new world in terms of what stocks or other issues are predictable. For the first time, you can use neural nets on rapidly rising stocks like Yahoo, AOL, and Dell, because they fluctuate greatly during the day, even though they mostly go up on a daily basis (at least they did prior to the new year!).
Avoiding Overnight Price Jumps
Another interesting thing is that now you can avoid the gaps between today’s close and tomorrow’s open, gaps that often aren’t explained by technical indicators. Get in and out of an issue as many times as you wish during the day, and close the position at the end of the day.
This “gap avoidance” is done in two ways. First, when you insert an indicator, you can check a box that instructs that the indicator NOT be computed across day boundaries. Neural nets will not train on bars where the input indicators are missing.
Second, you can add trading strategy conditions based on time of day. For example, you can enter a trade if both of the following conditions are true:
Your Indicator > 50
Time < 3:30 PM
Then you might want to exit if either of the following is true:
Your Indicator < -50
Time > 3:45 PM
Simple Models and Less Data
In our experience, the more complicated models that are needed for end of day position trading are not necessary for intraday trading. Simple models often work well.
Furthermore, since you are dealing with shorter bars, you won’t have to go back years in time to build neural nets and backtest strategies. That way you aren’t using training sets on market conditions that are now ancient history. If you download 2 days of 1 minute bars, you have the rough equivalent of 3 years of daily bars. Training sets of just the last few days are not only feasible but also advisable in our opinion.
On the other hand, some will disagree with us (after all, that’s what the Trader is all about: building models the way YOU want them instead of how someone else tells you models should be built!). Some will feel that longer periods may be better for training to pick up trends. If you use 90 trading days of 30 minute bars, you will have about 1170 bars, roughly equivalent to around 4.5 years of daily bars! So still, you do not have to go back to the Stone Age for data.
Optimal Performance
The bottom line will be this: for optimal performance, limit charts to only a few stocks with a couple weeks of intraday data if you are using small bars. Excessive time frames of small bars will likely result in lengthy data loading and slower program performance.
Interface
The interface for the DayTrader has pretty much the same interface as the NeuroShell Trader Professional. The first difference you may notice is that instead of just daily, weekly, and monthly bars, you can chose smaller intraday bars down to 1 minute bars. (Note: even though we only go as low as 1 minute bars, you can still see the ticks as they change the current bar being built.)
The next difference you will see is that the charts are no longer just daily. Since the bars occur all day, the charts can be zoomed in to intervals less than one day.
The third difference is that other intervals such as training periods, evaluation periods, backtest periods, etc., can also be chosen in smaller time intervals.
The fourth, and perhaps final MAJOR interface difference, is that we have combined the Data Download menu and the Data Directories menu into a new menu called “Data Sources”. It is here that you will also find a “Server” tab which enables you to specify the real time server (with only Quote.com currently as a selection). Also, you can select those exchanges from which you may want to download. This interface is going to be the same interface for the regular Trader and Trader Professional in release 3.0 – minus the Servers tab.
Daily Data Too!
It is worth noting that Quote.com can also supply daily data as well as intraday data. Just check the little box marked “Use server as an end of day source”. Then, when you load a daily, weekly, or monthly chart, the Quote.com server will download the data. Downloading usually takes only a few seconds for about 10 or 12 years of data.
Tick Data
So why didn’t we allow bars as small as a tick? Why did we stop at 1 minute bars?
First of all, issues seem to fall into two categories:
1) issues with many ticks per second, like AOL, INTC, DELL, etc.
2) other issues, where the ticks can be very infrequent. Most normal stocks do not even show frequent 1 minute bars!
So for category 1) above, there needs to be some consolidation just so that your system isn’t swamped with ticks. For category 2), there needs to be some consolidation just to be able to have reasonable data to make a model.
Secondly, tick data is not evenly distributed across the time axis; it has uneven spacing. Also, tick data does not contain open, high, low, and close fields; there is only one price. These two things mean that many of the standard indicators will not work properly with tick data, making the building of sophisticated models more difficult.
Nevertheless, as previously mentioned, the DayTrader displays the new bar being built (in red) and it constantly changes. Therefore, if there is a sudden movement, you will be able to see it happening before the bar is completed and added to your model.
Availability
The DayTrader should be shipping by February 28, 2000. Note, however, that Ward Systems Group, Inc. is a quality developer, and we will not hesitate to delay this date if our software still has bugs to be removed!
Pricing
The introductory price of the NeuroShell DayTrader Professional is $2295 (the full price will be $2495 at an as yet undetermined date).
Current owners of either the NeuroShell Trader or NeuroShell Trader Professional will receive special discounts until May 30, 2000. You must have purchased your Trader on or before January 13, 2000, in order to be eligible for this special discount. The upgrade price for owners of the Trader Professional is $700!! Owners of the Trader may upgrade for $1300!!
Pre-Orders
We will accept advanced pre-orders for the NeuroShell DayTrader Professional, in order that those who order earliest will receive the product earliest. However, your pre-order is only accepted with the following understanding:
1. We will charge your credit card at the time you place your order.
2. The ship date may be delayed past February 28, 2000.
3. You may cancel your order anytime prior to shipment.
If these conditions are not acceptable to you, please wait to order until we are actually shipping.
II. The Advanced User’s Web Site
Many of our new users may not know about the special web site we have for advanced topics, free downloads, and other news for advanced users only. Most of you have visited our sales websites (www.wardsystems.com and www.neuroshell.com), but those of you who want to get the most out of your products will want to visit www.ward.net. Your serial number is required to log in.
III. Career Counseling by Neural Net
Two reports using NeuroShell 2 for career assessment have been published recently. Both reports are based on career assessment research conducted by The Ball Foundation of Glen Ellyn, IL, with Andrew D. Carson as principal investigator (and Director of Ball Labs; see www.ballfoundation.org/labs).
The first report used probabilistic neural networks (PNNs) to model the career recommendations made by three expert career counselors on the basis of 12 aptitude test scores of 335 high school students (Carson, A. D., Bizot, E. B., Hendershot, P. E., Barton, M. G., Garvin, M. K., & Kraemer, B. [1999]. Modeling career counselor decisions with artificial neural networks: Predictions of fit across a comprehensive occupational map. Journal of Vocational Behavior, 54, 196-213). (Reprints of the report are available from Academic Press; see www.idealibrary.com.) The results suggested that neural networks hold promise for modeling the career recommendations made by career counselors. Considering that most high schools have a student-counselor ratio of several hundred to one, anything we can do to more efficiently use counselor time (such as use of these networks permits) extends the reach of this scarce resource.
The Ball Foundation has replicated this study with a larger sample of high school students, training a new set of PNNs (again using NeuroShell 2) that provides even more accurate modeling of expert counselor recommendations. Recommendations generated from these newly trained PNNs are incorporated into reports produced through The Ball Career System (TM), which The Ball Foundation markets to high schools.
The second study used Kohonen self-organizing maps to classify adult career clients (270 men, 227 women) on the basis of tests in the Ball Aptitude Battery (Carson, A. D. [1999]. Use of Kohonen self-organizing map to classify career clients on the basis of aptitudes. Journal of Career Assessment, 7, 357-380). Personality and vocational interest inventory results were also available for all participants, allowing the characteristics of each of the resulting eight groups to be explored in detail. The results suggested that as few as four tests might be used as the basis for classification of adults into these eight groups. (Reprints are available from the author at adcarson@ballfoundation.org).
IV. Y2K Downloader Alert – Release 2.51 NeuroShell Trader and Pro
For the new millennium, Dial Data has made a new downloader. Also, MetaStock and CSI have new file formats that some downloading services may be using. Furthermore, Omega has an unexpected date format that our TradeStation interface uses.
In response to all of these changes the vendors have made, we have produced release 2.51 to properly interface with downloaders and TradeStation.
Release 2.51 also has a few bugs corrected, so we recommend that everyone use it. You may download it for free, or we can send you new CDs for $30 plus shipping.
We may be posting updates to 2.51 or even a new release shortly if more problems are found, so watch www.ward.net for the latest news and updates.
By the way, Dial Data mailed each of their customers their copy of the downloader. Please don’t install and use theirs, because it can conflict with the one we install.