NeuroStrategy FAQ
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Beginning with Version 1.5 of NeuroStrategy Workstation and Intranet Server, the system offers three different trading options.
NeuroStrategy outlines the effects of the respective approach in the Equity Charts of the Model Builder. In addition, NeuroStrategy learns the optimal procedure for the desired trading behavior.
This scenario assumes that you request your trading recommendation within the final 1 1/2 trading hours of the trading day, in order to assume your position for the next 24 hours.
At point A, you request the trading recommendation in online mode (real time). The position is maintained until point B, i.e. about 1 1/2 hours before the closing of trading on the following day. In addition, you can make use of the following mechanisms:
In this scenario, NeuroStrategy operates with an investment horizon of 24 hours. The risk management for the overnight positions is acquired through learning. Stop loss orders may be employed as an additional safety precaution, although they usually entail a substantially lower return.
When assessing the trading histories in the charts of the Model Builder, please note that in training NeuroStrategy assumes the daily closing rate as the trading price. In practice, of course, this is not always the case, as you must position yourself prior to the close of trading. Statistically, this will work to your advantage or disadvantage with about equal probability.
In contrast to the end of day scenario, the Model Builder offers an absolutely realistic equity assessment in the case of this strategic option, since open orders are executed at the open rate. In this scenario too, NeuroStrategy acts in terms of a 24 hour investment horizon, although now a position is maintained from the start of trading on a trading day to the start of trading on the following trading day.
This approach does not require a real time feed. At point A, i.e. prior to the start of trading, you request your trading recommendation in offline mode. The position is maintained until point B, i.e. until the opening of the next trading day. In addition, you can make use of the following mechanisms:
The risk management for the overnight positions is acquired through learning. Stop loss orders or a sell off in the evening can be used as additional safety precautions, although they usually lower the return considerably.
For the purpose of lowering risk, it can be desirable not to hold any overnight positions. For this scenario too, NeuroStrategy is able to learn optimal trading strategies.
In this scenario, NeuroStrategy operates in terms of the investment horizon of the intraday period. This approach implies that open orders are placed and the positions are sold off in the evening.
For this case as well, no real time feed is required. You request your trading strategy in offline mode and place an open order. The position is maintained until the evening. In addition, you can employ the following mechanism.
During the gaps between two trading days, this approach forgoes all opportunities for gain but also prevents any loss. Thus, a significantly lower return is to be expected than in the other two scenarios. You should let NeuroStrategy generate additional models for the other two investment options. Even with overnight positions, NeuroStrategy in most cases achieves a similar risk level but at a considerably higher return.