June 14, 2016
IN THIS ISSUE

 



BUILD A SUPPLY AND DEMAND TRADING SYSTEMSupply
A SIMPLE SYSTEM BASED ON PRICE
 
Buy low and sell high is a trading system that is easy to understand but hard to implement.  Some traders call this a supply and demand system where a band of both support and resistance lines are drawn on a chart and trades are made when price falls below the demand band and and price rises above the supply band.  

But how do you determine band width?   Support and resistance lines graphed over several peaks can give you an indication of past values, but on any given chart there are many peaks and valleys. Where do you draw the lines?

The Nhood parameter sets the number of bars before and after a valley point.  The TPnum refers to the number of turning points ago.  

In NeuroShell Trader we used several copies of the Support and Resistance indicators from the Turning Points add-on.  We created a trading system that combines multiple support and resistance levels and let the optimizer find the most profitable levels. 

Turning Points Support and Resistance Indicators
The Support Level indicator output is a horizontal line representing the price level of a recent turning point valley. The most recent valley has number one, the second most recent has number two, and so on.  The Resistance indicator performs similar calculations for peaks.  The calculations include a specified number of bars (Neighborhood bars) to the left and right of the valley or peak.  
We built three different Trading Strategies and then combined them in a fourth strategy.  The first one was based on a single turning point ago for all rules.  The second one was set for two turning points ago.  Both of these optimized the neighborhood size from 1 to 3.  The third Trading Strategy optimized both the turning point and neighborhood size with values from 1 to 10.  The different values were an attempt to create a band of both support and resistance values rather than a single line.
The combo system entered a trade if two of the strategies generate a trading signal, while exits may occur on a single signal.
Combining three successful trading systems increases the probability that trading signals are correct.
 
Three different Turning Point Trading Strategies mimic a supply and demand trading strategy.

You can download the chart from this article on www.ward.net in the Examples section. 

In the future, re-optimizing the Support and Resistance indicators is essential for keeping the chart up to date with current market trends.
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SELECTIVE CALCULATIONS ANSWER IMPORTANT QUESTIONS Selective
NeuroShell Trader includes a group of Selective Calculation indicators that allow you to average, sum, or find the minimum and maximum value of a time series only when the condition you specify is true.  For example, you can create a moving average of the close only when the ADX indicator is greater than 50.

The Selective Range indicator a nalyzes only the time periods for which the specified condition is true and computes the range of time series value over the last n of those time periods.  

The Selective Calculation indicator  values may be used in trading strategies and as inputs to neural nets. You can download a sample chart from www.ward.net  in the Examples section.
TIPS FOR FASTER TECH SUPPORTTech
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Help us help you
We try to answer your tech support queries as soon as possible.  If you are reporting a problem with the software, we need to be able to reproduce the error in order to fix it.

The following information will help us investigate:
  • Send us the exact steps you took prior to the occurrence of the problem.
  • Send us data files and/or charts (with data saved).
  • Tell us which version of the software you are using along with which version of Windows is installed on your computer.
  • Give us the exact wording of any error messages you see (or send a picture of the message).
Note:  Pictures of charts or pictures of data files rarely help us solve a problem.  For NeuroShell Trader we need the chart with saved data.  If you're working with our other software programs, we need all of the relevant files.  

Thanks for your cooperation.


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