I’ve always thought that there are many life lessons buried in Seinfeld episodes, and I have even gotten some trading ideas I will share.

First from the “Bizarro Jerry” episode:

ELAINE
Yeah! An’ he is a friend, Jerry. He is reliable. He is considerate. He’s like your, exact opposite.
JERRY
So he’s Bizarro Jerry!
ELAINE
[pause] Bizarro Jerry?
JERRY
Yeah. Like Bizarro Superman. Superman’s exact opposite, who lives in the backwards bizarro world. Up is Down. Down is Up. He says “Hello” when he leaves, “Good bye” when he arrives.

Now from the “Opposite” episode:

GEORGE
Why did it all turn out like this for me? I had so much promise. I was personable, I was bright. Oh, maybe not academically speaking, but … I was perceptive. I always know when someone’s uncomfortable at a party. It all became very clear to me sitting out there today, that every decision I’ve ever made, in my entire life, has been wrong. My life is the complete opposite of everything I want it to be. Every instinct I have, in every aspect of life, be it something to wear, something to eat … It’s all been wrong.
( A waitress comes up to GEORGE )
WAITRESS
Tuna on toast, coleslaw, cup of coffee?
GEORGE
Yeah. No, no, no, wait a minute, I always have tuna on toast. Nothing’s ever worked out for me with tuna on toast. I want the complete opposite of tuna on toast. Chicken salad, on rye, untoasted … and a cup of tea.
ELAINE
Well, there’s no telling what can happen from this.
JERRY
You know chicken salad is not the opposite of tuna, salmon is the opposite of tuna, ‘cos salmon swim against the current, and the tuna swim with it.
GEORGE
Good for the tuna.
( A blonde looks at George )
ELAINE
Ah, George, you know, that woman just looked at you.
GEORGE
So what? What am I supposed to do?
ELAINE
Go talk to her.
GEORGE
Elaine, bald men, with no jobs, and no money, who live with their parents,
don’t approach strange women.
JERRY
Well here’s your chance to try the opposite. Instead of tuna salad and being intimidated by women, chicken salad and going right up to them.
GEORGE
Yeah, I should do the opposite, I should.
JERRY
If every instinct you have is wrong, then the opposite would have to be
right.

Of course contrarian strategies have been around forever, so the idea of doing the opposite of what everyone ELSE predicts is not revolutionary. Applying the idea to your own neural nets or trading strategies may be. Now you’d be doing the opposite of what YOU predict.

I have long believed that the markets are efficient – if patterns emerge, then they HAVE to change because if they don’t, too many people will detect the patterns and too many people will make money, which can’t happen. Neural nets are just one way of detecting patterns.

Most of us have experienced that sometimes our neural nets are just mostly wrong, usually after the training period ends, but sometimes even during the training period. That happens if you overfit, but it can also happen if the patterns change.

So if your neural net always is wrong, then the Bizarro opposite net would have to be right. Ok, not always, because sometimes BOTH nets will be wrong due to trading costs eating up many of the trades.

You can also build Bizarro trading strategies, not just nets.

If I tell you how to make a Bizarro model, will you keep it to yourself? I don’t want people outside of the NeuroShell world knowing about Bizarro models.

Start with your original net that is always wrong, or build a net that you make sure is always wrong by overfitting it so it does GREAT during training, then falls apart later.

Your original net can either be built in the Prediction Wizard or in a Trading Strategy with one of our add-on nets. Either way, a set of composite rules have been created. If your net was built in a trading strategy they will look something like this when you insert Existing data/calculations:

Pred > Long Entry Threshold: Predicted 5 day change
Pred < Long Exit Threshold: Predicted 5 day change Pred < Short Entry Threshold: Predicted 5 day change Pred > Short Exit Threshold: Predicted 5 day change

If you built your nets or traditional rule models in a Trading Strategies:

Long Entry Signal: Trading Strategy
Long Exit Signal: Trading Strategy
Short Entry Signal: Trading Strategy
Short Exit Signal: Trading Strategy

Now just insert a NEW trading strategy on the chart. For its long entry rule, use the short entry rule (above). For the long exit rule, use the short exit rule (above). Do the same for the short entry and exit. No need to optimize, there’s nothing to optimize. Use a start date after the original model was optimized. Bingo, you’re in Bizarro world.