Traders.com

NEUROSHELL TRADER: SWAMICHARTS

The neural networks in NeuroShell Trader can transform the visual discretionary information detailed in “Introducing SwamiCharts” by John Ehlers & Ric Way in this issue into an analytical trading system.

We started with five-, 10-, 15-, and 20-period RSI indicators, which are displayed on the chart in Figure 5. The five-period RSI (pink) shows early market direction but often overreacts. We decided to feed the five-, 10-, 15-, and 20-period RSI indicators into a neural network in order to predict the one-bar percent change in the opening price. We let the genetic algorithm optimizer refine the periods to maximize the net profit and maintain a slowly rising equity curve. We limited the ranges for each copy of RSI to match the shorter to longer time frames mentioned in the article.

FIGURE 5: NEUROSHELL TRADER, SWAMICHARTS. This sample NeuroShell Trader chart displays different versions of RSI and the neural network prediction with trading signals.

The optimizer found that three-, 10-, 15-, and 20-period versions of RSI fed into a neural network made the best model. No scripting, coding, or programming of any kind was involved. The chart in Figure 5 was created using the wizards in NeuroShell Trader.

Users of NeuroShell Trader’s Power User versions can put neural net predictions from different time frames on the same chart to expand the analysis.

Users of NeuroShell Trader can go to the Stocks & Commodities section of the NeuroShell Trader free technical support website to download a copy of this or any previous Traders’ Tip.

—Marge Sherald, Ward Systems Group, Inc.
301 662-7950, This email address is being protected from spambots. You need JavaScript enabled to view it.
www.neuroshell.com