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December 15, 2007

Neural Computing and the Invest

Using Neural Predictions to profit in the stock market

I fell in love with the concept and neural predictions are not only found at stock market.

The underling is this - if we take a very large sampling of data and run it through a computer
- we should be able to tell , with some certainty, the next outcome in a data stream.

Confused?
It is really very simple. Lets say you have a file with
the temperature of your home town at noon for the past 100 years.
That would be a file that contained 36,500 numbers (365 days multiplied by 100).

With all of this data - how close do you think we could predict the temperature of your home town tomorrow.
I would wager we could get within a 10% variance.

Before computers got so fast and so cheap. this would have been an almost impossible task.
But today we can run this calculation within seconds - and we could do it in an in-expensive application such as Excel.

Let me take the temperature analogy a little further because I think it will give you a clear picture of what VantagePoint Software is really doing.. Lets take that 100 years of daily data and answer this question -
if the temperature today was higher than the temperature yesterday - will tomorrows temperature be higher or lower than todays.

I am not asking you to tell me what the actual temperature will be, I just want to know if tomorrows will be
higher or lowers than today. Do you think with all of this data you would be right 8 out of 10 times? Some of you
might say that you do not need a computer to be right only 80% of the time.. But you would need a computer to get you
with any type of accuracy and do it very quickly.

If you wanted to build this application yourself you can look aound for data files on the high and low of a particular market or even stock you want. They should be found pretty easy with a simple google search then look for the function in
Excel.

The challenge is this.. How will you use this data to be profitable? It reminds of a story a great stock market teacher once old me. He said he could give a copy of the tomorrows Wall Street Journal today - and half of those people would
money.

You need to know when the high is, when the low is and what it does when it will hit this mark. The other issue is I can show you all of this - and without proper money management you would still end up broke with an 80% win rate.
If you made a dollar on every correct trade but lost $10 on every wrong one, you would be broke in no time and that would end your stock market career in a hurry..

Look for more graphs of this at $LINK2%

As always - more info can be found at http://vantagepointsoftware.info

Posted by David at December 15, 2007 11:04 PM

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