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Cybernetic Trading Strategies: Developing a Profitable Trading System with State-of-the-Art Technologies

Hardcover

$100.00

Cybernetic Trading Strategies: Developing a Profitable Trading System with State-of-the-Art Technologies

Murray A. Ruggiero

ISBN: 978-0-471-14920-0 July 1997 336 Pages

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Description

"The computer can do more than show us pretty pictures. [It] canoptimize, backtest, prove or disprove old theories, eliminate thebad ones and make the good ones better. Cybernetic TradingStrategies explores new ways to use the computer and finds ways tomake a valuable machine even more valuable." --from the Foreword byJohn J. Murphy.

Until recently, the computer has been used almost exclusively as acharting and data-gathering tool. But as traders and analysts havequickly discovered, its capabilities are far more vast. Now, inthis groundbreaking new book, Murray Ruggiero, a leading authorityon cybernetic trading systems, unlocks their incredible potentialand provides an in-depth look at the growing impact of advancedtechnologies on intermarket analysis. A unique resource, CyberneticTrading Strategies provides specific instructions and applicationson how to develop tradable market timing systems using neuralnetworks, fuzzy logic, genetic algorithms, chaos theory, andmachine induction methods.

Currently utilized by some of the most powerful financialinstitutions in the world--including John Deere and FidelityInvestments--today's advanced technologies go beyond subjectiveinterpretations of market indicators to enhance traditionalanalysis. As a result, existing trading systems gain a competitiveedge. Ruggiero reveals how "incorporating elements of statisticalanalysis, spectral analysis, neural networks, genetic algorithms,fuzzy logic, and other high-tech concepts into a traditionaltechnical trading system can greatly improve the performance ofstandard trading systems." For example: spectral analysis can beused to detect when a market is trending earlier than classicalindicators such as ADX.

Drawing on his extensive research on market analysis, Ruggieroprovides an incisive overview of cyber-systems--systems that, whenapplied correctly, can increase trading returns by as much as 200%to 300%. The author covers a wide range of important topics,examining classical technical analysis methodologies and seasonaltrading, as well as statistically based market prediction and themechanization of subjective methods such as candlestick charts andthe Elliott Wave. Precise explanations and dozens of real-worldexamples show you how to:
* Incorporate advanced technologies into classical technicalanalysis methodologies.
* Identify which of these technologies have the most marketapplicability.
* Build trading systems to maximize reliability and profitabilitybased on your own risk/reward criteria.

Most importantly, Cybernetic Trading Strategies takes you step bystep through system testing and evaluation, a crucial step forcontrolling risk and managing money.

With up-to-date information from one of the field's leadingauthorities, Cybernetic Trading Strategies is the definitive guideto developing, implementing, and testing today's cutting-edgecomputer trading technologies.
Partial table of contents:

CLASSICAL MARKET PREDICTION.

Classical Intermarket Analysis as a Predictive Tool.

Seasonal Trading.

Trading Using Technical Analysis.

The Commitment of Traders Report.

STATISTICALLY BASED MARKET PREDICTION.

A Trader's Guide to Statistical Analysis.

Cycle-Based Trading.

Using Statistical Analysis to Develop Intelligent Exits.

Using System Feedback to Improve Trading System Performance.

MAKING SUBJECTIVE METHODS MECHANICAL.

How to Make Subjective Methods Mechanical.

Building the Wave.

TRADING SYSTEM DEVELOPMENT AND TESTING.

Developing a Trading System.

Testing, Evaluating, and Trading a Mechanical TradingSystem.

USING ADVANCED TECHNOLOGIES TO DEVELOP TRADING STRATEGIES.

Developing a Neural Network Based on Standard Rule-BasedSystems.

Using Genetic Algorithms for Trading Applications.

References and Readings.

Index.