In this issue:
I. eSignal On Demand now available in NeuroShell 6.2
II. ChaosHunter 2.3
III. Commentary by Steve Ward, CEO
IV. Synopsis of NeuroShell Release 6 new features
V. Synopsis of Power User features
VI. One way to stop this newsletter
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I. eSignal On Demand now available in NeuroShell 6.2
eSignal On Demand is a less expensive version of the eSignal service that provides delayed intraday data. For some of you that might be attractive for the model building stage. Although 6.2 is not finalized yet, you can download beta 4 from www.ward.net if you are a release 6 user. Go to the “Release News” section. Download and install On Demand from esignal.com, and then run the eSignal On Demand charting package. After that, bring up NeuroShell and select the eSignal data feed.
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II. ChaosHunter 2.3
Release 2.3 of the ChaosHunter product is available in final beta form for download from ward.net if you are a user of ChaosHunter 2.1. Several bugs in 2.1 have been fixed, and a new feature was added that makes ChaosHunter formulas more compatible with TradeStation. ChaosHunter now defaults to producing a zero on a divide by zero error in a technical indicator, since TradeStation (and possibly other platforms) cannot handle the null value which used to be the default.
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III. Commentary by Steve Ward, CEO
To me, the hardest part about trading with analytic models is knowing which model to use and when to pull the trigger. I’ll discuss the “survival of the fittest” determination method I have evolved.
The background is that I like to trade intraday index and currency futures contracts because they are so simple, don’t require a lot of margin, and you can trade around the clock. Plus, unless things have changed you can still use the 60/40 section 1256 tax rule in the US (I am not a CPA so ask yours about that).
Every weekend I build a number of models that vary slightly from each other, in NeuroShell and ChaosHunter. Usually, I’ll optimize on two to six weeks of 5 minute bars. I hold out one to two weeks of out-of-sample data for the paper trading feature in NeuroShell. If I am using ChaosHunter, I test the top ChaosHunter formulas on the out-of-sample data and keep the formula that works best on that data.
In spite of the protective steps of using the paper trading and ChaosHunter features to avoid overfitting and market shifts, less than half of the models I build are likely to be big winners next week. But which ones? I watch them all on Monday and Tuesday and keep the high performers for trading the rest of the week. The others I throw out.
Those surviving models that indeed do trade well the rest of the week become my elites for hold over trading the following week, in addition to the new ones I build on the coming weekend. That way, I still have models to trade on Monday and Tuesday while I am watching the new ones.
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IV. Synopsis of NeuroShell Release 6 new features
Below for those who may be just returning to NeuroShell after an absence is a synopsis of changes in release 6.0 (excluding Power User features). From release 5, Trader Pro updates cost $250 and DayTrader Pro updates cost $390. Log into ward.net and visit Release News for a link to order.
Release 6 changes include faster model optimization through the use of multiple computer cores and hyper threading, additional biologically inspired optimization types, and more optimization goal functions (such as Maximize K-Ratio, Minimize Ulcer Index, and Maximize Lake Ratio).
FOREX enhancements make it possible to convert profit and statistics into your home currency, and to set commissions in pips. Integrated trading of FX allows you to send trades in amounts of your home currency or quote currency rather than shares, contracts or lots.
An innovative optimization tree makes it easier to select some model parameters for optimization while holding others fixed. You can also mix rule/input selection with parameter search.
NeuroShell DayTrader Pro users can now build models customized to a specific time trading range of the user’s choosing, e.g. from 11 AM to 2 PM, without the use of time rules. There is also a time range data filter, useful for excluding off-hours trades from data.
Finally, there is a new Exit on Close order type (for backtesting only).
Release 6.0 requires a live internet connection at startup, when charts are loaded, or optimization begins. There are new training videos and examples. Training videos can be viewed here:
http://www.markettilt.net/Programvideos/Intro.html
Please contact sales for additional information or explanations.
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V. Synopsis of Power User features
Power User versions include everything in the Professional versions plus a number of advanced features. Both Power User products can mix and match multiple time frames in data streams, indicators, predictions and trading strategies on a single chart. The mix may also include data from instruments other than the one being charted. The NeuroShell Trader Power User mixes daily, weekly, and monthly timeframes, while the NeuroShell DayTrader Power User mixes intraday timeframes including range, volume, and tick bars as well.
The Power User products offer powerful new features for trading strategies. If you don’t know how many shares or contracts to buy with each trade, you can select from 14 different sizing methods including optimal F and Kelly formula.
The pyramiding/scaling options add the ability to either enter or exit trades with more than one order. If you’re uncertain which of the position sizing or pyramiding methods to use, the Trader’s optimizer can assist in your decision process.
If you want to evaluate your model’s out-of-sample performance on a trading strategy that is re-optimized regularly on newer data, you’ll want to learn about the Power User multiple optimization walkforward feature for trading strategies.
One of the most practical features of the Power User products is the ability to optimize and backtest multiple trading strategy templates on multiple instruments in one continuous process.
Contact our Sales department for more information or questions.
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VI. One way to stop this newsletter
It is really easy. Just change your email address and don’t tell us.
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