Slacker, A posting of the highest quality that can be found on ET. Congratulations. What you say is confirming my point of view. Momoneythansens, The title of this thread is: What is your experience with Trading using Neural Networks? My answers are pointed to that question. Maybe NN can achieve many tasks and probably it can analyse better 623 indicators simultaneously. But I would like to ask you: give me a name of a NN that does real-time trades and give me the returns that are generated. Iâm almost sure I can beat that system. And that is the essence of the thread: a human brain normally will beat a NN in trading. My personal opinion is that a human brain is superior for pattern recognition/signal generation in trading systems. You can make the remark: maybe Spike is too stupid to develop a successful NN. Maybe true, thatâs why I want returns of successful NNâs. If I can beat them it would mean that it has nothing to do with my stupidity, but that indeed the human brain is superior.
The title of the thread is irrelevant when you introduce a fallacious argument to back up your point of view. I was merely pointing out the fallacy. This does not preclude the point of view you hold from being being correct. Furthermore: - I cannot make neural nets work for trading. - Therefore no-one can make neural nets work for trading. This is another logical fallacy. I think you know that's not true. Your answers were predicated on neural nets needing equal/better intelligence to a human brain in order to be useful for trading systems. My implied suggestion was that it might be better to leverage the sheer number crunching abilities of a neural net rather than focusing on making a neural net as "intelligent" or "smart" as a human brain. The comparison between net and human brain in the context of intelligence is meaningless as I have already discussed. The intent is not to make a sentient being from the neural net! Indeed, if one were to do so, he/she/it would probably decide not to trade. LOL. Well, I don't know of many people that give their neural nets a name. Unless you are referring to the software that is used to build the nets, in which case the question is also meaningless. If we are going to be pedantic about being on topic (suggest we shouldn't be ) the the title of this thread is: What is your experience with Trading using Neural Networks? ...which makes whether you can beat any system or not (neural net or otherwise) a non sequitur doesn't it? That is your interpretation. If you want to make it into a contest between human brain and neural net then that is a different matter. Once again, there is a limit to the number of things your eyes can monitor and also a limit to how fast one can react. Make of that what you will. Given several terrabytes of information, does it seem feasible that a neural net could be more efficient at mining that data for knowledge discovery, relationships, patterns, causality etc. compared to a human sitting down and manually sifting through the data? There are strengths that can be leveraged which outperform human brains. It has little to do with intelligence. I would never make that remark as a) I don't know you and b) that is as flawed an argument as any of those put forward by you. Ad hominen. This is bordering on argumentum ad ignoratium. It takes only one black swan to disprove your theory. Again, I'm not clear why there is a need to compare neural nets with human brains on the basis of stupidity or intelligence. This is a clear cut straw man fallacy. I'm getting the impression that you aren't a fan of neural nets? Am I close? LOL. They are a tool. They are not here to compete with human brains but to compliment. This is my humble opinion. MoMoney.
You see logical fallacies that donât exist. I clearly said and will quote a previous posting to be sure I say exactly the same I said before: My personal opinion is that a human brain is superior for pattern recognition/signal generation in trading systems. You can make the remark: maybe Spike is too stupid to develop a successful NN. Maybe true, thatâs why I want returns of successful NNâs. If I can beat them it would mean that it has nothing to do with my stupidity, but that indeed the human brain is superior. So I clearly say: or Iâm better than a NN or the NN is better but Iâm too stupid to develop a good system. To me this is just the opposite of what you say: what I cannot do no one can do. I never pretend that things are impossible because I cannot do them. Iâm just smart enough to know that there are things that go beyond my intelligence. [QUOTE LOL. Well, I don't know of many people that give their neural nets a name. Unless you are referring to the software that is used to build the nets, in which case the question is also meaningless. [/QUOTE] People who start playing on words and definitions in a discussion in general do this because of their weak position in the discussion. My mother language isnât English, I speak two languages fluently, and I can express myself more or less in English and in German. If we want to have a real good laugh we could continue in one of the two languages I master well, you probably wouldnât even get further than saying yes or no. I donât like discussions that are too theoretical and /or too hypothetical. If two athletes both say they are the best, the only way to find out is to compete and show in reality who is right and who is wrong. In this thread I said that my experience with NN was negative and that my own brain beat it. Thatâs on topic and a clear statement. Iâm curious to see a day trading NN in action. And if we compare the results of that NN with my day trading results it should be beyond discussion that the winner is the winner. When I read the postings of Bali_Survivor and Slacker, all the memories of my âNN periodâ come back in my mind as a movie. I had the same problems and obstacles, and finally the same conclusion. I quite this discussion now because I donât see any positive element that can be useful for others the way the discussion goes now.
Agree. You appear either to not want to or not be able to form a convincing argument to support your point of view Good luck!
The only convincing argument is a comparison of the RETURN of the NN and mine. Because the ultimate goal is making lots of money.
LMAO. I thought you quit this discussion! Let's not get into a pointless slanging match and destroy the thread. At least you are being honest in your last post rather than formulating a specious argument surrounding the number of neurons and synapses required to compete with a human brain. You don't need to respond but I would ask you to at least consider the black swan problem as it pertains to finding a neural net that can produce a better return than yours. I don't want to dwell on the straw man fallacy, but how about we don't compare human performance versus neural net performance? Instead compare: human performance vs human + neural net performance? i.e. using neural nets as an enhancer or compliment. I believe this is in keeping with the spirit of the original post. If you disagree, so be it. Again, you don't need to respond but if you are looking for acknowledgement that a human brain has superior intelligence to a neural net then you have my acknolwedgement on that matter. You won't find any arguments here! Hence the straw man. It's interesting to note that I have not necessarily disagreed with your point of view, only the tools you have used to back up your point of view. MoMoney.
Considering Neural Networks, it first must be pointed out that NN is in itself highly diverse. Not simply a matter of the number of nodes and layers. For a deeper understanding, look at the book by C.M. Bishop and the book by B.D. Ripley. In developing a trading strategy, one has many mathematical disciplines and tools at his disposal. I use some of these according to my needs, but I can assure you that I never ran into a case where I simply had to throw realtime ticks into a hopper of a single mathematical tool for juicy buy/sell signals to turn up as results. From my work with NN, I always discarded it as too cumbersome and ill adapted to what I set out to do, given that more elegant approaches could be found giving equal or better results. Selling a "NN trading strategy package" as an all inclusive approach is in my considered opinion an outright fraud pulled on simpleton believers.
Neural Networks can produce some very interesting and very accurate forecasts, but there are still many problems associated with trying to use them reliably for active trading. For one, there is no industry standards on the design/application of NN's for a novice to go by, though they all tend to use multiple streams of various input data to ultimately project the next bar of data. By iterating through recursive cycles that build on the "Next Bar" from the prior forecast bars, the network can build a projection of multiple bars out into the future. One of the biggest problems however, is deciding which input data and at what resolution, will be truly relevant toward building a reliable forecast. There's also considerable demand to having a true understanding of fairly complex math and statistical probabilities and how you want those probabilities to contribute to an overall parent population forecast, so while it may be easy to find, launch and play with NN's, getting truly usable results takes a huge investment of time and effort to research trial and error concepts. NN's are very subject to the adage of "Garbage in, Garbage out". As market temperaments go through cycles of different characteristics, which are subject to many outside influences, the long term value of an NN is fairly poor, without considering this. Accordingly the question comes to play as to how much historical data will remain relevant for how long, versus too much historical data causing stratification or saturation killing the sensitivity or reliability of the network output. Last, NN's seek to be a profit monger's tool which stands against the thought of being a skilled trader and truly working the market from fundamental trading approaches, which if you understand market analysis well enough to build a reliable NN, you wouldn't really need the NN to find reliable profit. The market functions based upon random events of market makers and herds of losers/winners. Essentially if all traders went to NN methods, the market itself would tend to stratify and fail to provide adequate variation required to fuel NN's; a similar complication in using more orthodox statistical analysis theory, as well. In the end, it's likely more rewarding to learn how to trade and put one's energy into learning the true essence of market and risk management and build expertise upon individual styles. Of course, this is a single and unofficial opinion of a programmer with only twenty years in statistical analysis. At only three years learning in trading I'm biased toward the fun of learning to become a trader, not a math genius. Mike