Table of ContentsThe table of contents for the manual is as follows: 1 INTRODUCTION to STOCK PROPHET . . . . . . . . . . . . . . . . 1-1 - Convenient Charting of Financial Instruments.. . . . . 1-1 - Moving Averages. . . . . . . . . . . . . . . . . . . . 1-1 - Technical Indicators . . . . . . . . . . . . . . . . . 1-1 - Mathematical Operations On Indicators. . . . . . . . . 1-2 - Relative Strength and Spreads. . . . . . . . . . . . . 1-2 - Historical Profitability Testing . . . . . . . . . . . 1-2 - Neural Network Interface . . . . . . . . . . . . . . . 1-3 - Data Base Maintenance. . . . . . . . . . . . . . . . . 1-4 - Hard Copy Output . . . . . . . . . . . . . . . . . . . 1-42 SYSTEM REQUIREMENTS FOR STOCK PROPHET OPERATION. . . . . . . . . . . . . . . . . . . . . . . . 2-13 INSTALLATION and SETUP. . . . . . . . . . . . . . . . . . . . 3-1 3.0A Addendum to Chapter 3.0 . . . . . . . . . . . . . . 3-7 Installation of AEGIS Security Key . . . . . . . . . . . 3-7 EMS Memory . . . . . . . . . . . . . . . . . . . . . . . 3-7 Computer Configuration Switcher. . . . . . . . . . . . . 3-84 OVERALL OPERATION of STOCK PROPHET. . . . . . . . . . . . . . 4-1 S - Select a Security and Plot It. . . . . . . . . . . . 4-3 M - Moving averages. . . . . . . . . . . . . . . . . . . 4-5 C - Compare Two Securities . . . . . . . . . . . . . . . 4-5 I - Indicators . . . . . . . . . . . . . . . . . . . . . 4-5 R - Profitability Calculation. . . . . . . . . . . . . . 4-6 P - Pointer and Numerical Values . . . . . . . . . . . . 4-6 B - BrainMaker Input . . . . . . . . . . . . . . . . . . 4-6 A - ASCII Interface. . . . . . . . . . . . . . . . . . . 4-7 X - Clear Screen . . . . . . . . . . . . . . . . . . . . 4-8 W - Import Plot into Word Perfect . . . . . . . . . . . 4-8 H - Hard Copy. . . . . . . . . . . . . . . . . . . . . . 4-9 Z - Configuration. . . . . . . . . . . . . . . . . . . . 4-9 D - DOS Shell. . . . . . . . . . . . . . . . . . . . . . 4-9 Q - Quit Running STOCK PROPHET . . . . . . . . . . . . . 4-9 4.0A Addendum to Chapter 4.0 . . . . . . . . . . . . . . 4-11 K - Change Computrac/MetaStock Data Directory. . . . . . 4-11 Y - Automation MACRO . . . . . . . . . . . . . . . . . . 4-11 Additional Information on Z - Configuration. . . . . . . 4-125 MOVING AVERAGES . . . . . . . . . . . . . . . . . . . . . . . 5-1 Simple Moving Average. . . . . . . . . . . . . . . . . . 5-1 Exponential Moving Average . . . . . . . . . . . . . . . 5-1 Weighted Moving Average. . . . . . . . . . . . . . . . . 5-2 Bands. . . . . . . . . . . . . . . . . . . . . . . . . . 5-26 SPREADS and RELATIVE STRENGTH . . . . . . . . . . . . . . . . 6-1 S - The Standard Spread. . . . . . . . . . . . . . . . . 6-1 F - The Percent Spread.. . . . . . . . . . . . . . . . . 6-2 R - The Basic Relative Strength #1 Calculation.. . . . . 6-2 P - Alternative Relative Strength #2 Calculation . . . . 6-3 6.0A Addendum to Chapter 6 . . . . . . . . . . . . . . . 6-5 C - Ratio of Securities (RATIO). . . . . . . . . . . . . 6-5 D - Ratio of Security to Security Plus Reference (S/(S+R)). . . . . . . . . . . . . . . . . . . . 6-57 TECHNICAL INDICATORS. . . . . . . . . . . . . . . . . . . . . 7-1 7.1 Accumulation Distribution Volume (ADV). . . . . . . 7-2 7.2 BrainMaker Estimate (BM). . . . . . . . . . . . . . 7-2 7.3 Breakout Index (BOI). . . . . . . . . . . . . . . . 7-3 7.4 Chaikin Oscillator (CHAK) . . . . . . . . . . . . . 7-5 7.5 Commodity Channel Index (CCI) . . . . . . . . . . . 7-5 7.6 Directional Movement (+DI/-DI). . . . . . . . . . . 7-7 7.7 Directional Movement (DX) . . . . . . . . . . . . . 7-8 7.8 Directional Movement (ADX). . . . . . . . . . . . . 7-9 7.9 Directional Movement (ADXR) . . . . . . . . . . . . 7-9 7.10 Moving Average Convergence Divergence (MACD) . . . . . . . . . . . . . . . . . . . . . 7-10 7.11 Moving Average Difference Oscillator (MAO). . . . . . . . . . . . . . . . . . . . . . 7-11 7.12 Moving Average of Indicator (MAI). . . . . . . . . 7-12 7.13 Moving Average of Stock (MAS). . . . . . . . . . . 7-12 7.14 Negative Volume index (NVI). . . . . . . . . . . . 7-12 7.15 On Balance Volume (OBV). . . . . . . . . . . . . . 7-13 7.16 Open Interest (OPI). . . . . . . . . . . . . . . . 7-13 7.17 Positive Volume Index (PVI). . . . . . . . . . . . 7-14 7.18 Price Replaced by High/Low/Close Combination (HLC). . . . . . . . . . . . . . . . 7-14 7.19 Price as Indicator (PI). . . . . . . . . . . . . . 7-15 7.20 Price / Open Interest DeltHxTrend (PODT) . . . . . 7-15 7.21 Price / Open Interest Statistic (POS). . . . . . . 7-16 7.22 Price / Volume Delta Trend (PVDT). . . . . . . . . 7-18 7.23 Price / Volume Statistic (PVS) . . . . . . . . . . 7-19 7.24 Price Volume Trend (PVT) . . . . . . . . . . . . . 7-21 7.25 Rate of Change (ROC) . . . . . . . . . . . . . . . 7-22 7.26 Relative Strength Index (RSI). . . . . . . . . . . 7-22 7.27 Stochastics (STO). . . . . . . . . . . . . . . . . 7-24 7.28 Volatility - Price Daily Range (DR). . . . . . . . 7-25 7.29 Volatility - Standard Deviation (SD) . . . . . . . 7-25 7.30 Volume (VOL) . . . . . . . . . . . . . . . . . . . 7-26 7.31 Williams Accumulation / Distribution #1. . . . . . 7-26 7.32 Williams Accumulation / Distribution #2. . . . . . 7-27 7.33 Williams %R. . . . . . . . . . . . . . . . . . . . 7-27 7.34 Custom Indicators & ASCII Interface. . . . . . . . 7-28 7.35 An Example of Operation - The McClellan Oscillator . . . . . . . . . . . . . . . . . . . 7-33 7.0A Addendum for Chapter 7. . . . . . . . . . . . . . . 7-37 7.36 Moving Average Convergence Divergence Oscillator (MACDO) . . . . . . . . . . . . . . . 7-37 7.37 Acceleration - Rate of Change of the Rate of Change (ACC) . . . . . . . . . . . . . . . . . . 7-37 7.38 Money Flow Index (MFI). . . . . . . . . . . . . . . 7-388 MATHEMATICAL OPERATIONS . . . . . . . . . . . . . . . . . . . 8-1 A - Detrend by Least Squares . . . . . . . . . . . . . . 8-1 B - Detrend by First Differences . . . . . . . . . . . . 8-1 C - FFT of Indicator . . . . . . . . . . . . . . . . . . 8-1 D - Limit and Set to Zero (LIM). . . . . . . . . . . . . 8-5 E - Summation (SUM). . . . . . . . . . . . . . . . . . . 8-5 F - Multiply by a Scale Factor . . . . . . . . . . . . . 8-6 G - Add a Bias . . . . . . . . . . . . . . . . . . . . . 8-69 PROFITABILITY TESTING . . . . . . . . . . . . . . . . . . . . 9-1 S - Trading Rule Menu. . . . . . . . . . . . . . . . . . 9-3 B - Generate Trading Signals and Calculate Profitability. . . . . . . . . . . . . . . . . . 9-3 G - Generate Trading Signals Only. . . . . . . . . . . . 9-3 P - Calculate Profitability Only . . . . . . . . . . . . 9-4 Q - Quit . . . . . . . . . . . . . . . . . . . . . . . . 9-510 NEURAL NETWORKS and the BRAINMAKER INTERFACE. . . . . . . . . . . . . . . . . . . . . . . . 10-1 10.1 Basic Discussion. . . . . . . . . . . . . . . . . . 10-1 10.2 Generating the BrainMaker Files . . . . . . . . . . 10-7 G - Generate Market Trend Output Neuron . . . . . . . . . . . . . . . . . 10-7 I - Save Indicator For Input Neuron Data . . . . 10-8 F - Set Up Fact Files For BrainMaker Training . . . . . . . . . . . . . . . . 10-9 T - Set Up Test While Training Files . . . . . 10-13 R - Fact Files Used to Run a Trained Network. . . . . . . . . . . . . . . . 10-14 S - Summarize Indicators Available for BM Files. . . . . . . . . . . . . . . . . 10-15 P - Print Out Training File Summary. . . . . . 10-15 A - Save BrainMaker Indicator Under a New Name . . . . . . . . . . . . . . . 10-16 C - Correlation of BrainMaker Price Trend Prediction and Actual Price Trend. . . 10-16 D - Operating BrainMaker . . . . . . . . . . . 10-17 10.3 Testing Your Network with Walk Forward Profitability Testing. . . . . . . . . . . . . 10-17 A Time Saving Tip. . . . . . . . . . . . . . . 10-20 10A Addendum to Chapter 10 . . . . . . . . . . . . . . 10-23 G - Additional Information on Market Trend Neuron . . . . . . . . . . . . . 10-23 E - Evaluate Correlation of Indicator and Market Trend . . . . . . . . . . . . . 10-23 Hints to Improve Generalization. . . . . . . . 10-2611 STOCK PROPHET UTILITIES. . . . . . . . . . . . . . . . . . . 11-1 T - Train BrainMaker.. . . . . . . . . . . . . . . . . . 11-1 C - Continue Training BrainMaker.. . . . . . . . . . . . 11-1 R - Run BrainMaker . . . . . . . . . . . . . . . . . . . 11-2 F - File Maintenance . . . . . . . . . . . . . . . . . . 11-2 E - Data Maintenance . . . . . . . . . . . . . . . . . . 11-2 D - Shell out to DOS.. . . . . . . . . . . . . . . . . . 11-3 Z - Configuration. . . . . . . . . . . . . . . . . . . . 11-3 Q - Quit . . . . . . . . . . . . . . . . . . . . . . . . 11-3 Alternative Version of SU. . . . . . . . . . . . . . . . 11-311.1 FILE MAINTENANCE . . . . . . . . . . . . . . . . . . . . . 11-5 A - Add a Security . . . . . . . . . . . . . . . . . . . 11-5 D - Delete Security. . . . . . . . . . . . . . . . . . . 11-7 E - Edit Security. . . . . . . . . . . . . . . . . . . . 11-7 F - Check Master for Data Consistency. . . . . . . . . . 11-7 R - Read Master. . . . . . . . . . . . . . . . . . . . . 11-7 Q - Quit . . . . . . . . . . . . . . . . . . . . . . . . 11-711.2 DATA MAINTENANCE . . . . . . . . . . . . . . . . . . . . . 11-9 S - Select Security. . . . . . . . . . . . . . . . . . 11-10 A - Add a Data Record. . . . . . . . . . . . . . . . . 11-10 F - Find a Date. . . . . . . . . . . . . . . . . . . . 11-10 E - Edit Data Record . . . . . . . . . . . . . . . . . 11-10 D - Delete a Data Record . . . . . . . . . . . . . . . 11-10 I - Insert a Data Record . . . . . . . . . . . . . . . 11-11 P - Split Shares Adjustment. . . . . . . . . . . . . . 11-11 V - Dividend Adjustment. . . . . . . . . . . . . . . . 11-11 M - Scale Data . . . . . . . . . . . . . . . . . . . . 11-12 Q - Quit . . . . . . . . . . . . . . . . . . . . . . . 11-13 Dividend and Split Record Keeping. . . . . . . . . . . 11-1311.0a Addendum to Chapter 11.0 . . . . . . . . . . . . . . . . 11-14 G - Reformat Files for EXCEL, N-TRAIN and other Neural Networks. . . . . . . . . . . . . 11-15 N-TRAIN Batch Files. . . . . . . . . . . . . . . . . . 11-20References . . . . . . . . . . . . . . . . . . . . . . . . . . . R-1Appendix A TUTOR - A TOUR Through STOCK PROPHET. . . . . . A-1 A.1 Basic Tutorial Example . . . . . . . . . . . . . . . A-1 A.2 Tutorial Example Showing the BrainMaker Interface. . . . . . . . . . . . . . . . . . . . A-6 Addendum to Appendix A . . . . . . . . . . . . . . . . . A-23Appendix B Basic BrainMaker Operation. . . . . . . . . . . . . . B-1 B.1 BrainMaker DOS Version 2.3. . . . . . . . . . . . . B-1 B.11 Training . . . . . . . . . . . . . . . . . B-1 B.12 Continue Training. . . . . . . . . . . . . B-2 B.13 Run BrainMaker Indicator . . . . . . . . . B-3 B.2 BrainMaker DOS Versions 2.5 and 3.0 . . . . . . . . B-3 B.21 Training . . . . . . . . . . . . . . . . . B-3 B.22 Continue Training. . . . . . . . . . . . . B-4 B.23 Run BrainMaker . . . . . . . . . . . . . . B-4 B.3 Using the BrainMaker Indicator. . . . . . . . . . . B-5Appendix C Files Used By STOCK PROPHET and BrainMaker . . . . . . . . . . . . . . . . . . . . . . . C-1Appendix D Operating with Windows Versions of BrainMaker . . . . . . . . . . . . . . . . . . . . . . . D-1 D.1 Installation of BrainMaker Windows 3.0 Version . . . . . . . . . . . . . . . . . . . . D-1 D.2 BrainMaker Training . . . . . . . . . . . . . . . . D-3 D.3 Running an Indicator using a Trained Network. . . . . . . . . . . . . . . . . . . . . D-4 D.31 Indicator Method #1. . . . . . . . . . . . D-4 D.32 Indicator Method #2. . . . . . . . . . . . D-5Appendix E - WPROF Utility . . . . . . . . . . . . . . . . . . . E-1Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1 |