Trade Ideas Blog

Bleeding Edge Probability Analysis

May 21, 2012

Bleeding Edge Probability Analysis

In our previous post about the danger of pattern recognition, “Don’t be Fooled by Pattern Recognition”,  we discussed some of the underlying problems associated with trying to discern probabilities by visually examining chart patterns. Pattern recognition is a subjective and very difficult investment/trading discipline to scale successfully. There are many reasons for this and we drew parallels between eye witness testimony compared to DNA evidence.

So, how does the Trade Ideas version of DNA evidence work, and why should you trust our probability analysis?

Machine Learning

The answer is “Machine Learning” and it is quickly becoming a buzz word in trading and investing as more people experience success from applying this approach versus the traditional discretionary style that is employed by the majority of traders.

Probability Assesment

So what is Machine Learning? This link will give you the complete description from Wikipedia http://en.wikipedia.org/wiki/Machine_learningbut the highlight is as follows – Machine learning, a branch of artificial intelligence, is a scientific discipline concerned with the design and development of algorithms that allow computers to evolve behaviors based on empirical data, such as from a database.  Imagine that while you look at chart and see what you visualize as a support break, while keeping your eyes on SPY and GLD, our machine is looking at thousands of underlying variables that are happening at the same time and comparing them to past variables and assessing the predictive value of each to see when the highest odds of the support break actually line up.  This is our version of DNA evidence.

Big Data, Big Ideas

The real key separating Trade Ideas technology from other backtesting software is our proprietary database.  We built our database from scratch so you cannot buy this information even if you wanted to buy it.  Our technology keeps track of every metric on every stock.  This allows us to build algorithms that scan for predictive value in a way other software products simply can’t replicate because it would require them to have the same database.  The database is the differentiating factor.

Applying this technology to your trading is a process and we are looking forward to you getting the confidence of having science on your side of the trade.

To download Trade Ideas Pro and subscribe or try the Free Demo, visit the Trade Ideas Pro download page.

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