Easy trading system creation using technical analysis indicators and neural networks

Use YOUR rules, indicators, and formulas to analyze today’s volatile markets, without writing any code. Instead, use our point and click “wizards” for indicators, predictions, and trading systems. For example, create multiple variations of the same indicator, such as 9 and 13 period moving averages, in one pass through the indicator wizard.

The indicator wizard allows you to build complex indicators by combining a number of the 800 included indicators. You can save these “custom” indicators for use in other trading systems. The prediction and trading strategy wizards also allow entire systems to be combined, so you can build “ensemble” systems with more power to find profitable trades. Save your favorites as templates for later use.

Trading models generally are built using technical analysis indicators based upon the raw data and other instrument data. Let’s say you believe that the following indicators will be useful in models that will produce forex market trading signals:

• The spread between each currency and EUR/USD
• The relative strength between each target currency and EUR/USD
• A stochastic %k indicator applied to each target currency

Therefore, the next thing you might do is insert the indicators above into your chart using the Indicator Wizard. The Indicator Wizard contains over 800 standard indicators from which to choose.

When the 800 standard indicators are not enough, you can easily build some pretty complex indicators without programming or using a special language simply by combining NeuroShell Trader’s built in indicators.

The Indicator Wizard uses “point and click” to construct new combinations of market indicators, rules, and math functions so that you never have to worry about a missing comma or unmatched parens. Save the indicators you build as custom indicators for later use with the ability to change parameter names, defaults, display order and even visibility.

Take your trading to another level when you purchase add-ons that let you apply everything from moon cycles and advanced neural network architectures to John Ehler’s MESA9 frequency and phase analysis.

Sometimes you may have in mind indicators that are too complex even for our Indicator Wizard to construct. In that case, you can program your own in standard languages like C++, Power Basic, and other languages capable of creating dynamic link libraries.

Once the chart loads up with the requested data, you are ready to define one or more models in the chart. Any model that you build in the chart automatically applies to all instruments in the chart. Your model can be optimized the same for all chart pages, or custom optimized for each chart page. Models can be either Trading Strategies or Predictions.  Note that you can insert several models in a chart. Once you insert a model, it automatically applies to all chart pages.

You may or may not have a clue about how the indicators you have chosen work. If you do, you probably have some idea about how they would be used to generate trading signals, rules like “Buy when the EUR/USD is crosses above it’s 100 bar moving average after 1pm.” In this case you will want your model(s) to be Trading Strategies, even if you are unsure what values should be considered high and low above. The genetic optimizer will find the values for you.  If you either have no clue about how the indicators work, or no clue about appropriate rules for them, you will probably want to build a Prediction with a neural net for your model(s), because neural nets find their own rules.

The Trading Strategy Wizard is a fast mechanism for entering trading rules without having to type messy formulas or write in some algorithmic programming-like language.

The Wizard is all point and click. You just list the rules for long entry, long exit, short entry, and short exit (cover). Each of these rules is in fact an indicator you build just like any other indicator – with the Indicator Wizard. You can also enter indicators for stop and limit price levels, including trailing stops.

If you want to optimize your trading strategies, the genetic optimizer will do these things for you:

• Find which of the rules you have listed should be used in combination
• Find out what the parameters of the indicators in your rules should be set to
• Perform both of the above at the same time (we call this full optimization)
• Even your stops and limits can be optimized.

When the Trading Strategy is complete, it will show you historical buy and sell signals. As new data is added to the chart, those buy and sell signals will continue to appear with each new bar. You can insert a variety of indicators to plot how your profit is growing.

Predictions are neural nets made with the Prediction Wizard. That’s what our standard neural nets do, they make predictions about the future value of a data stream, usually a price or change in price, but any data stream can be predicted. Here is basically all you have to do to make a prediction model:

1. Choose some inputs – data streams, usually indicators, that you believe are leading indicators of the market
2. Decide what you want to predict, usually change or percent change of the open or close
3. Decide how much historical data will be used to train the neural net
4. Decide how much historical data you want to use to test how well the neural net has learned

If you want to optimize your prediction, the genetic optimizer will do these things for you:

• Find which inputs you listed should be used in combination
• Find which indicator parameters values should be set to
• Perform both of the above at the same time
• Find neural network thresholds for trading

When the prediction is complete, it will show you historical buy and sell signals. As new data arrives in the future, those buy and sell signals will continue to appear with each new bar. You can insert a variety of indicators to plot how your profit is growing.

Integrated Trading

Automatically send trades to your favorite brokerage while you’re out on the golf course

Once you have developed a model that you are happy with, you can specify that trades be sent to your FXCM broker account for execution, with the fill price being returned to NeuroShell. The trades can be sent automatically, or only after you approve them.

Advanced Money Management

Control the money allocated to each trade

You can select from over fifteen different sizing methods. If you don’t know how many shares, contracts, or units to buy with each trade, let the optimizer decide the most profitable method

• Fixed Size
• Fixed Dollar
• Percent of Account
• Fixed Leverage
• Fixed Fractional
• Kelly formula
• Optimal f
• Secure f
• Profit Risk
• Volatility Risk
• Fixed Ratio
• Margin + Drawdown Sizing
• Fixed Dollar Amount per Unit
• Fixed Dollar Fixed Dollar Risk

Pyramiding and Position Scaling

Enter or exit trades with multiple orders

Pyramiding and scaling options add the ability to either enter or exit trades with more than one order. If you’re uncertain which of the pyramiding or position sizing methods to use, the Trader’s optimizer can assist in your decision process.

Alerts

Visual and sound notification of important events

NeuroShell lets you take almost any condition, not just trading signals, and define an alert to let you know when that condition has just occurred.

Multicore Distributed Optimization

Lightning fast optimization of complex models with distributed processing across multiple cores of a single computer

NeuroShell Trader allows you to distribute optimization processing across multiple computer cores and multiple hyper threads on a single computer.

As an example, if you have an Intel Core i7 processor, which has 4 processing cores each with the ability to process two simultaneous hyper threads, the NeuroShell Trader optimization processing could be spread out to 8 different threads. Theoretically, you could realize up to an 8x speed increase in optimization on a Core i7 computer, however due to the overhead of controlling, setup, and communication with each distributed thread, the speed increase may approach, but will never reach 8x.

You also have options to limit the number of cores/hyperthreads utilized during optimization if you want to use other programs during optimization without any processor sharing.

Cross Market Data Analysis

Build trading systems which react quickly to market moves by including other market indexes, data and indicators

Charts contain data streams, which can be plotted or hidden. Of course, the first data streams loaded will be open, high, low, close, volume, and possibly more raw data for the target instruments. You can also insert other data streams called other instrument data that will be available in each chart page, like indexes or raw data for other stocks.

This other instrument data is information you want to use to create trading signals. For discussion, let’s say you believe that the EUR/USD will be useful for deciding how different currencies should be traded. You would then load EUR/USD as other instrument data so that it will be an available data streams in all chart pages.

Multiple Time Frame Analysis

Combine different timeframes of data, indicators, predictions, and trading strategies into one chart or analysis

Your charts can mix and match multiple time frames in data streams, indicators, predictions, and trading strategies as well as other instrument data. The NeuroShell Trader Power User mixes daily, weekly, and monthly timeframes, while the NeuroShell DayTrader Power User can include multiple intraday timeframes as well. For example, the Trader Power User lets you combine daily and weekly bars in the same trading system. The DayTrader Power User version can create a single trading system with minute, hour, and range bars. Think of the possibilities.

Walk Forward Optimization

Evaluate performance on systems that re-optimized regularly on newer data, and then applied to out-of-sample data

If you want to evaluate your model’s performance on a Trading Strategy that is re-optimized regularly on newer data, and then applied to out-of-sample data, you can use the Walk Forward Optimization feature.

For example, you can backtest reoptimizing a Trading Strategy every week for the past 10 weeks. After each reoptimization, the Trading Strategy is applied to data for the following week. The NeuroShell Trader Power User will perform 11 total optimizations in this case, each shifted by one week. Ten of those optimizations will show the “actual” trading results had you traded the reoptimized model for the week following the optimization period. The final optimization is optimized up to the very last date so you can go forward into the future trading a model that has been optimized on the very latest data in the same manner as the prior 10 simulated optimizations.

This feature can also be applied to intraday bars if you own the NeuroShell DayTrader Power User version.

Batch Processing

Optimize and back test multiple trading strategy templates on multiple instruments in one continuous process

The Power User versions include a “batch” mode of reoptimizing and backtesting models you’ve created previously.

Simply save the model as a chart template. Save templates for ALL of the models you wish to incorporate in this batch process. To begin the batch process, simply select all of the templates you wish to include in the batch on the first page of the Trading Strategy wizard. You’ll have the option to modify the dates, costs, and optimization parameters that you wish to use during optimization of all of the templates. You DO NOT have to rebuild each model.

After the models are backtested and you have analyzed the results, you can check the templates you wish to see displayed in a chart.