The NeuroShell Trader comes with a number of templates to get you started building prediction models.

We’re going to create a model for Merck using daily bars. To start the Prediction Wizard, go to the Insert Menu, select Insert New Prediction. We’ll select the Stochastic Inputs template. The inputs to this model are going to be variations of Stochastic %D, %K, and Slow D. We’ll let the optimizer sort out the final inputs.

We’ll modify the prediction parameters. We’re going to predict % change in open, 1 trading day into the future. We’re going to hold out 1 month of out-of-sample data, we’re going to trade 100 shares, at $7 per trade. We’ll trade both long and short. For our objective for training the model we’ll select Maximizing Return on Account * Equity Curve correlation. On the Optimization tab, we’ll select Evolution Strategy as our optimization technique.

Click next and the model is created for us. Select the Prediction Analysis Button to view a detailed report on your model.

Click finished and the trading signals are displayed on the screen. We’ll hide the close to make it easier to view them. The red and blue triangles are the trading signals, while the blue and red xx’s are fills for the signals.