Trading system lab
First, a simple preprocessor is run that automatically extracts and preprocesses the necessary data from the market you wish to work with. You may use your own data, patterns, indicators, intermarket relationships or fundamental data within TSL.
The Trading System may then be manually traded, traded through a broker, or automatically traded. You may create the Trading System yourself or we can do it for you.
Trading system lab, either you or your broker may trade the system either manually or automatically. Trading system lab System Lab's Genetic Program contains several features that reduce the possibility of curve fitting, or producing a Trading System that does not continue to perform into the future. First, the evolved Trading Systems have their size pruned down to the lowest possible size through what is called Parsimony Pressure, drawing from the concept of minimal description length.
Thus trading system lab resultant Trading System is as simple as possible and it is generally believed that the simpler the Trading System is, the better it will perform into the future. Secondly, randomness is introduced into the evolutionary process, which reduces the possibility of finding solutions that are locally, but not globally optimum. Trading system lab is introduced over not just the trading system lab of the genetic material used in the evolved Trading Systems, trading system lab in Parsimony Pressure, Mutation, Crossover and other higher-level GP parameters.
Out of Sample testing is performed while training is in progress with statistical information presented on both the In Sample and Out of Sample Trading System testing. Run logs are presented to the user for Training, Validation and Out of Sample data.
Well behaved Out of Sample performance may be indicative that the Trading System is evolving with robust characteristics. Substantial deterioration in the automatic Out of Sample testing compared to the In Sample testing may imply that creation of a robust Trading System is in doubt or that the Terminal, or Input Set may need to be changed. Finally, the Terminal Set is carefully trading system lab so as to not overly bias the selection of the initial genetic material towards any particular market bias or sentiment.
TSL does not begin its run with a Trading System predefined. In fact, only the Input Set and a selection of market entry mode or modes, for automatic entry search and assignment, is initially made. A pattern or indicator trading system lab that may be thought of as a bullish situation may be used, discarded or inverted within the GP. No pattern or indicator is pre-assigned to any particular market movement bias.
This is a radical departure from manually generated Trading System development. A Trading System is a logical set of instructions that tell the trader when to buy or sell a particular market. These instructions rarely require intervention by a trader.
Trading Systems may be manually traded, by observing trading instructions on a computer screen, or may be traded by allowing the computer to enter trades in the market automatically. Both methods are in widespread use today. There are more professional money managers that consider themselves "Systematic or Mechanical" traders than those who consider themselves "Discretionary", and the performance of Systematic money managers is generally superior to that of Discretionary money managers.
Studies have shown that trading accounts generally lose money more often if the client is not using a Trading System. The significant rise in Trading Systems over the past 10 years is evident especially in the commodity brokerage firms, however equity and bond market brokerage firms are becoming increasingly aware of the benefits through the use of Trading system lab Systems and some have begun to offer Trading Systems to their retail clients.
Most mutual fund managers are already using sophisticated computer algorithms to guide their decisions as to what "hot stock to pick" or what "sector rotation" is in favor. Computers and algorithms have become mainstream in investing and we expect this trend to continue as younger, more computer savvy investors continue to allow portions of their money to be managed by Trading Systems to reduce risk and increase returns.
The huge losses experienced by investors participating in buying and holding stocks and mutual funds as the trading system lab market melted down in past years is furthering this movement towards a more disciplined and logical approach to stock market investing. The average investor trading system lab that he or she currently allows many aspects of their lives and the lives of their loved ones to be maintained or trading system lab by computers such as the automobiles and aircraft we use for transportation, the medical diagnostic equipment we use for health maintenance, the heating and refrigeration trading system lab we use for temperature control, the networks we use for internet based information, even the games we play for entertainment.
Why then do some retail investors believe that they can "shoot from the hip" in their decisions as to "what" stock or mutual fund to buy or sell and expect to make money? Finally, the average investor has become wary of the advice and information forwarded by unscrupulous brokers, accountants, corporate principals and financial advisors.
What took weeks or months for the Trading System developer to produce in the past may now be produced in minutes through the use of Trading System Lab. TSL makes use of a high speed Genetic Programming Engine and will produce Trading Systems at a rate of over 16 million system-bars per second based on 56 inputs.
Note that only a few inputs will actually be used or necessary resulting in generally simple evolved strategy structures. With approximately 40, tosystems needed for a convergence, time to convergence for any data set can be approximated. Note that we are not simply running a brute trading system lab optimization of existing indicators looking for optimum parameters from which to use in an already structured Trading System.
The Trading System Generator begins at a zero point origin making no assumptions about the movement of the market in the future and then "evolves" Trading Systems at a very high rate combining information present in the market and formulating new filters, functions, trading system lab and relationships as it progresses towards a "genetically engineered" Trading System.
The result is that an excellent Trading System may be generated in a few minutes on years of daily market data on virtually any market. Trading System Lab is the result of years of hard work by a team of engineers, scientists, programmers and traders, and we believe represents the most advanced technology available today for trading the markets.
For the past 20 years mathematicians and software developers have searched indicators and trading system lab in stock and commodity markets looking for information that may point to the direction of the market.
This information may be used to enhance the performance of Trading Systems. Generally this discovery process is accomplished through a combination of trial and error and more sophisticated trading system lab Mining".
Typically, the developer will trading system lab weeks or months of number crunching in order to produce a potential Trading System. Many times this Trading System will not perform well when actually used in the future due to what is called "curve fitting". Over the years there have been many Trading system lab Systems and Trading system lab System development companies that have come and gone as their systems have failed in live trading. Developing Trading Systems that continue trading system lab perform into the future is difficult, but not impossible to accomplish, although no ethical developer or money manager will give an unconditional guarantee that any Trading System, or for that matter any stock, bond or mutual fund, will continue to produce profits into the future forever.
Over the past few years there have been several approaches to Trading System optimization that employ the less powerful Genetic "Algorithm". First, GP's converge on a solution at an exponential rate very fast and getting faster whereas Genetic Algorithms converge at a linear rate much slower and not getting any faster. Second, GP's actually generate Trading System machine code that combined the genetic material indicators, patterns, inter-market data in unique ways. These unique combinations may not be intuitively obvious and do not require initial definitions by the system developer.
The unique mathematical relationships created may become new indicators, or variants in Technical Analysis, not yet developed or discovered. GA's, on the other hand, trading system lab look for optimum solutions as they progress over the parameter range; they do not discover new mathematical relationships and do not write their own Trading System code. GP's create Trading System code of various lengths, using variable length genomes, will modify the length of the Trading System through what is called non-homologous crossover and will completely discard an indicator trading system lab pattern that does not contribute to the efficiency of the Trading System.
GA's use only fixed size instruction blocks, making use of only homologous crossover and do not produce variable length Trading System code, nor will they discard an inefficient indicator or pattern as readily as a GP. Finally, Genetic Programs are a recent advancement in the domain of machine learning, whereas Genetic Algorithms were discovered 30 years ago. Genetic Programs do include all of the main trading system lab of Genetic Algorithms; crossover, reproduction, mutation and fitness, however GP's include much faster and robust features, making GP's the best trading system lab for producing Trading Systems.
The license allows the autodesign of an unlimited number of strategies on an unlimited number of markets over an unlimited number of time frames. The TSL license requires the signed acceptance of restrictions regarding external use of TSL generated systems or signals.
Contact TSL to discuss your particular application and license options. In all cases below please note that TSL produces completely open source code. A free license may be obtained by a developer by referring trading system lab full price license client to TSL.
A free license will be granted to the developer and will be maintained at no cost provided the full price licensed client keeps his or her license current. This is done under the conditions that the developer will assist the client in his work with TSL. TSL will still provide training to both the developer and the client.
Up to three individuals may share the license cost. Each individual will need to apply for the TSL license individually. We recogonize that most clients want their own license and are uncomfortable with sharing their Trading system lab work with others.
For example, trading system lab three individuals want their own license and KEY. Again, the full three year commitment must trading system lab paid in full up front. This multiple license option for small groups is the lowest cost option available for TSL. All Trading Strategy code is Open Code. Training and setup is included in the license cost. All licenses include months at no cost to allow for installation and training.