|
|
Article: Interpreting feedback to build a better system. (includes related article)
- Article from:
- Futures (Cedar Falls, IA)
- Article date:
- July 1, 1994
- Author:
CopyrightCOPYRIGHT 1994 Summit Business Media. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
|
System traders of the world unite! Here's a way to weed out those age-old errors in your system and find the most profitable signals to improve your trading returns. Neural networks simplify the process.
In essence, a mechanical trading system is really a predictive model of a given market. Many predictive models suffer problems due to the effect of noise or inadequate understanding of the problem being modeled. In most fields outside of trading, errors of the last few forecasts are analyzed to improve future forecasts. This concept is called "feedback," and can be applied to trading models, too.
Feedback is valuable to identify which signals from a trading ...