Cybernetic Trading Strategies: Developing a Profitable Trading System with State-of-the-Art Technologies

Introduction

During the past several years, I have been on a quest to understand how the markets actually work. This quest has led me to researching almost every type of analysis. My investigation covered both subjective and objective forms of technical analysis—for example, intermarket analysis, Elliott Wave, cycle analysis, and the more exotic methods, such as neural networks and fuzzy logic. This book contains the results of my research.

My goal was to discover mechanical methods that could perform as well as the top traders in the world. For example, there are technologies for trading using trend following, which significantly outperform the legendary Turtle system. This book will show you dozens of trading systems and filters that can increase your trading returns by 200 to 300 percent. I have collected into this volume the best technologies that I have discovered. This overview of the book's contents will give you the flavor of what you will be learning.

Chapter 1 shows how to use intermarket analysis as a predictive tool. The chapter first reviews the basics of intermarket analysis and then, using a chartist's approach, explains the many different intermarket relationships that are predictive of stocks, bonds, and commodities. That background is used to develop fully mechanical systems for a variety of markets, to show the predictive power of intermarket analysis. These markets ...