February 16, 2017
IN THIS ISSUE
ENHANCE TRADER PREDICTIONS WITH CHAOSHUNTER
Once you build a prediction in NeuroShell Trader and let the genetic algorithm fine tune indicator parameters, you can export the refined versions of the indicators and build a complementary model in ChaosHunter. The result may be a more profitable model. If you create several different ChaosHunter models, you can build an entire ensemble trading system that increases the probability of a correct trading signal. (Look at the Example 20 chart in NeuroShell Trader and simply substitute ChaosHunter models for the neural net models.)
When You Don’t Know the Rules
In previous newsletters we have talked about using a neural network prediction when you have some indicators (or other data streams) that you follow, but you can’t define the rules for when to trade. So you let a neural net combined with a genetic algorithm optimization of indicator parameters do the work for you. We did exactly that and the result is the prediction at the top of the chart. We let the genetic algorithm pick the number of periods for the Average Directional Movement (ADX) and Williams %R indicators, as well as two copies of the regression slope indicators that were used as inputs to the net.
This chart displays a neural net prediction at the top of the screen and an enhanced ChaosHunter version of the model developed using the same indicators as inputs.