In this issue:
I. Announcing MESA8 for NeuroShell Trader
II. Announcing the Entropy Indicators for NeuroShell Trader from NOXA Analytics
III. Editorial Comment by Steve Ward, CEO
IV. Release 5.0 features
V. Introductory sale for Mesa8 and NOXA Entropy Indicators for newsletter readers only.
VI. One way to stop this newsletter
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I. Announcing MESA8 for NeuroShell Trader
John Ehlers has completely updated his trademark MESA (Maximum Entropy Spectral Analysis) indicators in a new add-on for the NeuroShell Trader called MESA8. The MESA8 indicators were developed and programmed by Ehlers, a world renowned expert in applying scientific principles and DSP (digital signal processing) technology to the art of technical trading. The MESA8 indicators measure whether the market is in cycle or trending mode and deliver precise trading signals for either situation.
Ehlers’ MESA8 add-on is a collection of dynamically tuned indicators that derive their adjustments from the high resolution Maximum Entropy Spectral Analysis (MESA) measurement of the spectral content of market data. A low lag, accurate measurement of the dominant cycle is extracted from market data and used to calculate each indicator.
Ehlers explains that a simplified model of the market consists of the combination of a trend and a cycle. Since the cycle period is known, it can be removed from the data to expose the underlying trend. The market is best traded using oscillator-type indicators when it is in a cycle mode and is best traded using moving average-type indicators when it is in trend mode. The MESA8 collection of indicators is not only dynamically adjusted by the dominant cycle, but advanced DSP techniques are used to produce low lag and non-causal signals in time to give users a trading advantage.
The Mesa8 add-on is a joint project between Mesa Software, Inc. and Ward Systems Group, Inc. Mesa developed the theory and programming, and Ward Systems is selling and supporting the add-on. Mesa8 requires NeuroShell Trader Professional release 5.0 or greater and is delivered only by Internet download. The price is $499.00.
For more information visit:
www.neuroshell.com/addons.asp?mesa8
or
www.mesasoftware.com for more details on John Ehlers and MESA technology.
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II. Announcing the Entropy Indicators for NeuroShell Trader from NOXA Analytics
Have you ever heard of Claude Shannon’s entropy? It may be just what you need to find profitable patterns in the market. The backbone of NEI add-ons (Noxa Entropy Indicators) is a powerful search engine for patterns that are resistant to entropy (the tendency of systems to fall into disorder). That means you will be able to trade compelling pockets of order that arise in the market.
Entropy is at its roots a measure of uncertainty and we know that the one factor that drives markets absolutely crazy is uncertainty. Noxa NEI add-ons are particularly powerful indicators in that they look at a security’s price ability to remember the information disclosed which is pertinent to it. By applying Shannon Entropy concept, it is now possible to gauge the information content in price series. Here are some brief descriptions:
NEI Prediction Days
Markets sometimes lock themselves into predictable futures. NEI Prediction Days helps you unravel these foretelling events by searching for local histories with high predictability potential.
NEI Shannon Entropy
Entropy is used to determine how the degree of randomness (or uncertainty) of price data changes as capital is being allocated. You’ll be able to detect subtle variations in price action regime that could precede trend reversals.
NEI Mutual Information/ Global Correlation
Select the best inputs and lags for your neural-nets by maximizing their “Mutual Information”. As opposed to more traditional correlation tools, NEI Mutual Information gives a measure of statistical regularity that is sensitive to any functional relationship. It is particularly useful in capturing nonlinear dependencies in financial returns.
NEI Transfer Entropy
Pick market-leading and sensitive inputs. Adding information from inputs that are independent may actually result in a worsening of your prediction. NEI Transfer Entropy helps in selecting relevant inputs that, by exchanging information among each other, make your neural-nets generalize better.
Transfer Entropy shares some of the desired properties of Mutual Information but its construction is inherently ‘predictive’ and takes the dynamics of information transfer into account.
The NOXA NEI add-on is available directly from NOXA Analytics:
http://neuroshell.noxapredict.com/en_products.htm
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III. Editorial Comment by Steve Ward, CEO
1. What are the chances that in one newsletter we announce two add-ons that deal with entropy? I don’t think we’ve ever announced two add-on vendors in one newsletter no matter what the technology. I don’t pretend to know about the technology behind either MESA or NOXA, but I do know that they were both developed by some very bright guys who have been in the trading/modeling business a long time. MESA indicators have been on the landscape for years, mostly available to TradeStation users, but John Ehlers has been continually improving them. The NOXA NEI provide information that users have been requesting from us for years – when instruments are predictable, how much randomness is in the price, how to pick neural net inputs.
2. Last newsletter I implored everyone to carefully study the new examples in release 5.0. After that I received an email from a long time user of NeuroShell whose message demonstrates what I was trying to get across:
“Even though I have used NST for about 5 years now, I really enjoyed and learned from going through the set of examples you devised.”
So at the risk of becoming irritating, I want to repeat the message again. Please study the new 5.0 examples carefully. Don’t just read them, take the time to dig into what we did and how we did it. You have invested a great deal of money in NeuroShell and the update, so why not make an effort to get your money’s worth?
I’ve already built a new example that will show up in release 5.1. Please make a note to read that one too when 5.1 is available.
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IV. Release 5.0 features
1. Deactivate reminder – this feature is for those of you who take your NeuroShell back and forth from work to home, and can’t remember to deactivate before you leave one place for the other. You can specify that NeuroShell prompt you to deactivate when the program is exited.
2. Save data in chart – this feature is really great to have when you want to send your chart to someone (e.g., tech support) and you want them to be able to see exactly what you are seeing. After all, all indicators and models are data driven, and there is no guarantee that when someone else loads your chart that the data won’t be slightly different. Even if that person uses the same data feed, there can still be differences in data, either because time passed, the feed corrected values, or you got on a different server that may have had data missing or just different – yes it happens!
3. Workspaces and multiple chart selection – NeuroShell will now allow you to select multiple charts for loading at the same time. Furthermore, after multiple charts have been loaded, you may now save your “workspace”. Your workspace remembers what charts have been loaded so that next time you run NeuroShell, all you have to do is load your saved workspace in order to reload all those charts. You do not have to specify the charts again. You may save multiple workspaces, or resave a workspace if you add or delete charts.
Note that saving a workspace does not save the charts in the workspace. Modifying your charts is still a separate operation.
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V. Introductory sale for Mesa8 and NOXA Entropy Indicators for newsletter readers only.
In articles above we announced Mesa8 and NOXA Entropy Indicators for NeuroShell. We will now give our readers a great chance to purchase them for $50 off and $90 off respectively. For the month of June, 2006, if you are a reader of this newsletter, you may purchase the Mesa8 add-on for $449, and the NOXA NEI addon for $199, ending June 30th 2006.
Our VIP customers (those who have spent more than $4000 in purchases with Ward Systems Group in the past) may purchase the MESA8 addon for even less – only $399 during the month of June. When you order, mention that you are a VIP.
Order the NOXA NEI add-on directly from NOXA Analytics:
http://neuroshell.noxapredict.com/en_products.htm
Order the MEAS8 add-on from us, but when you order, please specify that you want the newsletter sale price of $449 or $399. If you order online, put “newsletter sale” in the comments, and we will apply the discount.
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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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