Neural Nets - A tool for the 90's Message Board

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Strategies & Market Trends : Neural Nets - A tool for the 90's

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To: LastShadow who wrote (806)	7/18/2000 9:08:46 PM
From: xu, b.	Read Replies (1) of 871

Well, I've been playing with NN for 3-4 months now and would like to share here with what I found. The concept of NS trader does not fit well with my style. They develop one model for each stock. You can not trade this model with other stocks. My original motivation was to find a general leading indicator for general market downturn. (It's ironic that I was right in timing but I lost money. My timing was perfect because I saw plenty of warning signals in high tech fever. But I was so devoted to develop a leading indicator that I fail to pull myself decisively out of market. The result is that I lost more than I should because I did not tighten my stops according to my own rules). My trading models work great with bull market and almost all fail on bear side. It's understandable because of the positive bias of the market. It's easier to develop a good long model. But I hold the belief that one can make quick bucks with short side. Since the slope of price drop is steeper than taht of price rise. Timing is everything. So far, I have not yet come up with a valid generalized short model with NS trader. My explanation is that NN alone can not replace the human brain. One has to come up with a good model and ask NN to do optimization instead of relying solely on NN to give a solution. I certainly learned a lot here. It has been a great learning experience for me. I thank Lastshadow and Optim for bringing me here and I hope everyone can benefit from these stimulating discussions. It looks like the lights for several sectors turned green again. So I will resume my operation on the long side. WIll continue my work on short side trading. It looks like NN alone can not give me a solution that I want. It's my experience over a very short period anyway. Bai

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