The fifteenth chapter computer and trading system
introduction
In the technical analysis and commodity futures trading, the computer increasingly plays a more and more important role. In this chapter, we will talk about its superiority. The computer to prepare a variety of technical tools for analysts, it is very convenient. And a few years ago, these jobs are going to cost a lot of manpower. Of course, it is also a user to know how to use so many tools, this is the disadvantage of computer.
If users on various indicators of theoretical fragrant foundation without proper understanding, not familiar with the various indicators of studying methods, so that a lot of computer software non call him dizzy can not. Worse still, some friends have a large amount of technical information at hand, sometimes resulting in an illusion that they have the upper hand. Before looking at the terminal, a lot of dazzling keyboard is smug, like he had become the master of technical analysis.
I want to emphasize here is, if the user has mastered the basic concept of technical analysis, then the computer will make him such as tiger tim. In fact, if we look at a variety of computer programs, we will see that many of the tools and indicators are fairly basic, we are in front of the contents of each chapter are introduced. Of course, there are also a number of sophisticated tools, have to use the computer can not.
I've heard some computer traders say that without a computer, you can't make a deal. I beg to differ. As early as the computer was born before a little inspiration scientists in mind, traders on the ups and downs in the market. Realistically, if there is no computer blending, in technical analysis and the actual transaction has a lot of things we can do better. Some work we only need to use a map, a ruler, much more convenient than the computer. Some long term analysis doesn't need a computer at all. In fact, if we want to analyze the market, then in the open computer, you should have completed the technical analysis of the big boy. Computer, though useful, is just a tool. It can help good technical analysis and make still further progress. However, it cannot make the poor analysts reborn.
Trac compu software
In the previous chapters, we have mentioned several kinds of software for compu trac is currently the most prestigious is existing the most detailed technical analysis system. Therefore, we will mainly take this as an example, to look at the work of the computer. First of all, let's talk about the configuration of the computer hardware of the system. Then, we will review the existing tools and indicators. Next, we will introduce its subsidiary features, such as the user can choose a variety of automatic functions. The computer not only provides a variety of technical research ways, but also facilitate the detection of their profitability. This is the computer's ability to optimize the location, thus, it constitutes the most valuable features. If the user knows programming method, you can also not limited to the existing software, and create index system of their own.
Wells Wilde's directional motion system and parabolic system
We would also like to look carefully at Wells Wilde's more popular "directional movement system" and "parabolic system". In our discussion, we will take these two systems as examples to evaluate the advantages and disadvantages of automated trading systems. We will see that the automatic trend adaptation system can perform well in a particular market environment. In addition, we also note that the automatic system can be simply used as a validation of the technical indicators, into our market analysis.
Artificial intelligence pattern recognition
On every menu we give, there are so many options available, and friends may be surprised. Computers do not allow us to live more convenient, but put out a lot of tricks, which are all the same to study, this is not the thing to get more trouble, for example, trac compu provides about 40 kinds of research. If we expect so much information to verify each other before we conclude (and seek the timing of the transaction), do we have to make it through?. It is a complex system, which is developed by using the logic ability of computer, and can choose the best combination from many indexes. In this regard, we have to make a little introduction.
A little computer knowledge
We can put trac compu. Apply to all kinds of financial instruments, including stocks, options, and futures. We are here mainly for futures. You can put it in the IBM personal computer, their compatibility, as well as the apple. We take the IBM model as an example. The system uses the menu command mode, easy to operate. That is to say, we can continuously through a menu selection function, carry out various operations. The PC has two floppy drive, therefore, we need to work two floppy disks. In the a drive, the trac compu package. In the B drive, the data file.
Trac compu does not provide the data that the city. The user's coffin to collect data from other ways. We can manually input data to the data disk, and also can read the data automatically from the information service through the telephone line. Recommend friends to use automatic data services. Trac compu for each data service system are introduced. They also provide the software and equipment needed to transfer data and build files.
At the beginning, the user should at least be collected over the past few months the price of information, so as not to cook rice without. Later, the new daily data entry. If the computer networking and quotation system, then it can also be "online" timely analysis of market price. However, in our case, only talk about the daily data collected. These data can only be available after the market closed. Finally, we also need a printer to print out of the screen, all the content of the. If we connect the plotter, can draw the color chart.
Analysis tools
Here we briefly introduce a variety of tools and it contains various options. This software can be respectively according to the day in, day by day, by week, month by month, seasonally, and gradually form to display data. There are three kinds of daytime chart format. For example, the standard format of each root Gann, price segments have been arranged, not for holidays and weekends left blank. There are seven days a week format, mainly used for cycle analysis, in this form, out in the chart over the holidays and weekends. No blank problems during the week on the chart, but the user can also artificially to select a day as the initial days of the week.
Let us look at a variety of menu. The 1 is the main menu menu (see Figure 15.1). The left column of the string of numbers (from FL to FS) is Zhengjian m disk on the left side of the kin (remember that we say now is c}rnpu tr}}/pc). Each of which according to health are corresponding with certain functions, percussion
You can put it out. The following is a summary of each presentation.
The menu is below the other comments, including the movement of the cursor. We can put the cursor in any position on the screen. At the bottom of the screen will display various data cursor date. The cursor moves back and forth, we can read the data on the 25th. Flip function to will move the cursor to a chart of the leftmost, which shows the more historical data. Using some analysis tools such as trend line, and we may also want to move the cursor. If the user wants to see the date instead of the price in the chart below, then press the F7 button (screen) on the line.
In the main menu, press the F7 key, enter the menu state 2 (see Figure}} ". Here, too, as long as we knock on each key can complete the corresponding function selection. For example, the F1 (Graphic), the user can choose to display the data in the chart below or date. The so-called data, including the current cursor date price, transaction T, positions and interests and technical indicators of numerical. Please note the more, users can through F3 (log) health, the price axis from the arithmetic scale transform into a logarithmic scale, form a semi logarithmic chart. Using a logarithmic scale, we can put in the arithmetic scale under the huddled price graph clear, in order to analyze. F7 (model) is used to switch the screen display precision, we can choose between middle and high resolution. In the color condition, we can only use in the resolution.
The tools menu
Press the F6 button in the main menu state,
We are a vital part of technical analysis
Enter the tools menu. This menu (menu 3)

　F1 trend: trend line and pipeline. The user through the cursor in the graph. Seven line drawing point.
A FZ envelope: make the envelope shift above or below the price graph, such as the mobile platform
The average envelope (see Chapter ninth).
A cycle of F3 cycle on the map marked: (see Chapter fourteenth).
F4 1% retracement: between high and low percentage of the selected annotation retracement position. The user will
Must first choose a good high and low. Later, we have a detailed explanation of this point.
}}j: a compression at the daily chart format and converted into weekly and monthly chart format.
Chart format.
I a profit: profit ability test (we must advance the program in another
, "profitability test" pre work ".
F7 a miscellaneous; which contains a variety of sophisticated technical tools, such as the Faye Bo Naqi curve, the region,
Time area (see the thirteenth chapter), as well as Andrew long fork, etc..
FS: a Fourier Fourier analysis. This is a complex statistical tool, which is mainly used for the identification period (see Chapter fourteenth).
"FG a EV map. Draw the trading volume weighted daily chart. The vertical line in the transformation of the daily chart
Small rectangular box, the width of the day of the transaction t. The more the transaction T, the price of the day of the box is thicker. This is also a way to show the transaction t information.
We noted above the on screen display data in a variety of ways, and applies these methods, some tools. Friends have been to, which many tools, like the trend line and the percentage retracement, we are quite familiar with. Also, such as Andrew fork length, rich in leaf analysis, ev maps, perhaps some strange (graph} 5.} A and B to}5* away a and B are several illustrations of these new tools). The benefits of the computer is to convenient, fast to complete the function. However, the effect how, still depends on the user can blend of these tools to the analysis. In addition, we do not need to use these tools through. Friends may wish to according to their trading style and ideas, choose the most suitable tools from. Here we have to consider the various research methods including.
Study on the choice of means
In the main menu (menu 1 state we knock FL, into the "research" submenu. Here we can carry out various calculation and analysis. The menu 4 is the technical research of the sub menu. Among them there are 29 choices. As long as we look the health, you can enter the 'various analysis methods under a sub menu, select the next step. For example, "t" (page second a) finished with it, we will see the following menu:


　　A, simple
B. brush chart
C.O}} method
D. Transaction t accumulation (VA method)
VA, e method swing index
We can be based on the solid line, brush figure (which is a common format for *ob, VA)
Method, VA swing index (in the seventh chapter we have introduced) and other forms, the transaction T Information
Show out.
Moving average (n) after the knock, the user will get the following options.
A. simple
B: weighted
C. exponential weighting
In each case, the user must select an object (such as the highest price, the lowest price, or the closing price) of the average value. We can also apply the moving average to any set of data or a set of technical indicators have been constructed, such as obv trading volume, a variety of swing index, or even some price difference, etc.. Users must also define the number of lines that are used, and the number of days in the time span of each line. Finally, you need to select the location of the average line, "take in", or in accordance with the usual practice (we discussed in the ninth chapter moving average line).
Most research methods require the user to define the number of days in the formula. However, usually the system also provides the default value, that is, the software itself for a variety of research, the preparation of a certain value. For example, in the analysis of random index, the default value is 5 days, and the relative strength index of the default value of RSL is 14 days. The default value is displayed on the screen, the user simply press the Enter key, it indicates that the default value is received. If the user is not familiar with a certain kind of research, will not choose the best input values, this is a special feature of the default value. Users through the test, you can adjust or optimize these parameters, in order to adapt to their own needs.
We're not going to explain all the menus here. Which some studies, such as method of ups and downs, Howland index, McClellan swing index, short term trading index ('trii}1), the main should be months in the stock market analysis < the New York Stock Exchange of iyse price number of Yu. Here we will no longer be described. Most of the studies are presented in the previous chapters. Commodity price pipeline and other index (CCI) and demand index basically belong to the category of swing index (the latter is calculated using the transaction amount). Trend analysis and hall dynamic index, in a cycle of Chapter 14 we said that moving average mutual authentication / divergence (MACD) index, power index (price), moving average line swing index (two average distance), transmission index (ROC), relative strength index (RI, a random index k%d, and Williams index (R), in chapter ten "swing index", we are also discussed. In addition, on the moving average, interest in the position, trading T, point map, parity, and the difference is not to say. Recently, this software package has been added to the commodity selection index, linear regression, intermediate prices, swing index, as well as volatility index and other research means.
Wells Wilde's parabolic and directional motion system
Here, time and space are not allowed us to study carefully the above 29 kinds of them one by one. However, there are still two kinds of research is worth us to further explore. They are all created by Sir Wilde, sir Welles, in his "new ideas for the technical trading system" (Trend Study Edition, 1978). In this book, also includes the Wilde on the other three kinds of research ideas. These three are also included in the trac compu menu - commodity selection index, the relative strength index, swing index.
Parabolic system (SAR)
Wilde's parabolic system belongs to the time and price ". This string of letters "SAR" said "stop and reverse do stop and reverse), meaning we in the implementation of the protective stop orders at the same time, also follow the original position of the opposite direction reopen new positions. This is also a trend to adapt to the system. Its name comes from its appearance, and when it tracks the market, its stop loss point is similar to that of a parabola (see Figure 15.5 to 15.8). Note that when prices rise, parabolic systems of ideas (i.e., stop and reverse point) living in the price below, also showed a uptrend, but it is often the beginning of pace slower, then keep up with the trend of the change. In a downward trend, it is a walk back and forth, and in the opposite direction (ideas in the price above). The system can also provide users with the next day's SAR price.
Wilde has set up an accelerating factor for this system. He put the daily stop loss points along the direction of the trend is up and down. In the trend of just germination, the location of the stop loss change is relatively slow, so as to set aside time for the consolidation of the new trend. After that, with the increase of the acceleration factor, the change of the SAR point position is correspondingly accelerated, until the speed of the price change is caught up. If the trend is out of the question, then the result is usually a stop loss and do the signal. As the illustration, the trend in the environment, work wonders parabolic system. Please note in figures 15.5 and 15.6, and in Germany and Mark crude oil market, the trend tracking effect of the system is pretty. However, in Figure 15.7 and figure 15.8 do not show the s&p index and the U.S. government bond market example, the situation is different. In two markets, in the trend of good, the system has a good effect, and in shuttle to stretch without trend stage, but successive occurred seesaw phenomenon.
In the s&p500 market (as shown in Figure 15.7), please note that, from December to January, it is a horizontal extension of the system.
If we can choose a filter or some measure, to determine whether the market is in the trend of the state, then the problem may be solved. This is the motivation for Wilde to design the directional movement index (see Figure 15.9). A directional movement index marks the amount of each market direction of movement (trend), by which we can compare the degree of trend of each market. Wilde uses the adxr line, according to the scale of the readings from 0 to 100, the market's direction of movement of the situation to be rated. The adxr line is high, said the trend of the market is stronger, therefore, can act as a trend of better place. In Figure 15.9, the upper and lower two adxr lines correspond to the previously mentioned s&amp;p500 index and the German Mark market. Since last November, German mark (below chart) showed a strong trend characteristic, if the line of adxr low (under 20), it means that the market is no trend, not suitable for the trend conforms to the system. S&amp;p500 index contract just done an example of this situation. At this point here, we still put away the trend of the system as well.
Looking back on the figure 15.5 and 15.7, we see that the parabolic system in the German Mark market performance is not bad, but in the back part of the s&amp;p 500 market is very poor. Originally, if there is a directional movement index in advance, then the trend of dealers in a timely manner in the stock index market from the body and back, and then put into the foreign exchange market. Because the adxr line reading scale is from 0 to 100 distribution, so, the trend of dealers as long as the right to choose the highest degree of the market on the line. For the low level of the market, we may wish to adopt a non - trend system (such as the swing index, etc.).
We can either put the directional movement index as an independent system, or it can be used as a parabola or the other trend of the filter. In the DMI analysis, there are two lines, one is +di, the other is -di. The previous line is positive, measures the market upward movement, after a line is negative, indicates the downward movement. Figure 15.10 shows the two lines. The lines +di, -di line. When +di (solid line) line through DL line (dashed line) to form a buy signal, and when it down through the -di line, constitute a sell signal.
Figure 15.11a and b show the application of parabolic and directional motion systems in the gold market. Please note in the picture of the parabola, since November last year, it issued a total of eight trading signals, many of which belong to the seesaw phenomenon. Below for the same period the directional movement index, from November is short instructions, and from mid March to the beginning is to do long instructions, a total of only two transactions. Obviously, the parabolic system is more sensitive, that is, the signal appears both in time and frequently. Anyway, if we use a directional movement index as a filter, only in the direction of the parabolic signal and the direction of the line of motion consistent to implement the signal, then the better pseudo signal can avoid. From this, we still put the parabolic with the direction of the movement system to use as a good. The two complement each other, complement each other.

　　Please note the lower part of figure 15.11b. This is adxr chart, the map display, from November to February, the market has characteristics of strong directional motion curve rises; from early February to early March, the trend is weak (down curve); after, on the market to appear the trend of the strong. The best time to work for a trending system is when the adxr line is up. As shown in the previous illustration, direction of motion of the system and the adxr line of not how sensitive and, therefore, is suitable for to the slightly longer term trend traders. Wilde also designed another against the market trend degree evaluation method, the more in tune with the short-term market changes, this is the following commodity selection index (CSI).
Commodity selection index (CSI)
Oscar Wilde in CSI design, not only the over algorithm transplantation in the direction of motion of the system and the adxr line, and added to the consideration on the volatility factor (the so-called average real interval, ATR), margin requirements, and transaction costs, and factors. DMI is intended to serve a longer-term trend - based trader, while CSI attempts to reveal a stronger market for short - term traders. From CSI could be used for the identification of the "double high" market; both high direction movement characteristics and (relative to the margin requirements and transaction cost) high volatility characteristics. Generally believe that, whether from the perspective of the trend of the strength of the point of view, or from the volatility of the size of the point of view, CSI high level of the market is a good trading medium.
The above describes the Wilde of a few more famous system, to provide a basic framework for friends. If you are interested in learning more about his various systems and their construction methods, you can read the original Wilde, I believe that friends will not be disappointed.
Classification of various tools and indicators
As can be imagined, in the face of so many patterns of research method, the number of friends will be a bit confused. So, here we have to tidy up, to give them a classification:
And the basic chart format: line diagram, map, chart, points difference parity graph
- Chart scale: arithmetic scale and semi logarithmic scale
- Chart: price, trading volume and open interest
- volume: simple form, brush map, obv method, VA method, ev method, demand index representation
- basic tools: the trend line and pipeline, the percentage retracement, moving average, and swing index
- moving average: reference envelope
- swing index: Commodity Index (CCI), pipeline dynamic index, moving average moving speed index, Sakura index, MACD, random index, Williams index, RSI, VA, power demand index, Holzer index
Cycle: Holzer power index, trend analysis, cycle length, Fourier analysis
Eliot wave: Fibonacci line, arc and time zone fan
"Miscellanea: Andrews long fork, linear regression, weighted median price, closing price, Volatility
Wilde: RSI, commodity selection index, directional motion system, parabolic system, swing index.
The use of various tools and indicators
So much content can be described as a multitude of things. If we are full of baskets picked melons, that how to start it. So first of all, we use the basic tools, such as price, trading volume and open interest, the trend line, percentage retracement, moving averages, and the swing index. Point and figure chart and graph, price parity is certainly useful, but they are in a secondary position. Please note that there are many types of swing index. I think, eyebrows beard, is not appropriate. We can choose one or two kinds of the most suitable for their own in life. If friends of cycle theory and Fibonacci tools, and other fields have special interest, then it might be as a second information. In the process we are engaged in the cycle analysis, Fourier analysis is very helpful. We can also draw the cycle to adjust the moving average and the swing index time span. But to be clear, this is a complex concept, to be friends in-depth study and practice. For the use of automated trading systems traders, Wilde and DMI need special attention the parabola. The rest of the tools and options, might as well by you to appreciate that. I personally recommend, friends to find out on their own, the most effective tool, and then use them to. This chapter will also talk about how to deal with a number of technical indicators back problems (see figure 15.12 to 15.14).
Automation and optimization and profitability test

　　After the user selects a group for each of the market research method, can put the automation of the work flow. That is to say, we have a certain analysis program or means of collocation, respectively and corresponding data file. Then, the user will not need to worry, the computer will automatically complete the tasks specified by the. The profitability of test procedures, we can use historical data to test the pre designed trading rules. In fact, this performance is the most valuable feature of computer analysis. With it, we can detect historical information on any trading system or technical indicators. At the same time, through the optimization program, we can choose the best parameters for each respective. Finally, in the technical analysis software package, and one for the users to design their own part of the study, called user research. If the user master the knowledge of computer programming, and like inventive, they can own hands-on preparation analysis software.
And a computer automated trading system two views
70 in the economic environment has strong characteristics of inflation, the bullish trend mainly occurred in all commodity markets, and continued for several years. It is in this strong and lasting bullish trend in the tide came into being, the tendency transaction system. Since then, various technical trading systems such as bamboo shoots after a spring rain appeared. The most impressive record profits are. It is also in this period, the public and private goods market funds have become increasingly popular. These funds are substantially equal and mutual funds in the stock market. They have hundreds of millions, tens of millions of large dollar funds, and in the process of operation, rely heavily on the trend of technology system. As long as the bull market rose more than, then Everything will be fine. A variety of systems Caiyuanguangjin, new funds have also opened, all to the satisfaction of all people. At this time, the accident occurred. In the late 80, inflation bubble finally broken clothes market, embarked on a five year milestone in the wind and rain continued to fall.
In 80, the automation system conform to the trend of an unlucky year. Although most of the use of this kind of system fund is still profitable, but the results are far from the 70's miraculous results match. For this setback, many say. First, these systems have never been detected in bearish market. Second, 80 years on the market trend is not durable and not widely. Occurred in the bear market in the medium punch and consolidation patterns, disrupting the traders of the bear market deployment, often triggered by seesaw phenomenon. Although the trend is well documented, but they are mainly concentrated in a small part of the market. The results obtained from the one or two trends on the market by other non profits, the market trend to offset the loss.
According to the system performance in the past few years below this point has been very clear: rely on the computer automatically generated the trend of trading signals comply with the system, and not take the endless cornucopia. Of course, this is not to say that they have no value, should put them all thrown into the garbage heap to. The key is that we should have a correct understanding of the. The following is a list of the advantages and disadvantages of these systems.
The advantages of automated trading system
L. is not influenced by human subjective emotions.
2 is more strict self-discipline.
3 to achieve a higher degree of coordination and consistency.
4 trading in the direction of the trend.
5 make sure not to miss the opportunity to enter the market in the direction of the important trends.
6 allow full profit growth.
7 limit the loss to a certain extent.
Weaknesses of automated trading systems
1 the vast majority of automated trading systems are responsive to trends.
2 from a profit point of view, the trend of the system is mainly dependent on the main trend.
3 when the market has no trend to follow, the trend of the system is generally not profitable.
4 the market is not a trend for a long time, and in this stage is not suitable for the use of trend based approach.
According to my personal experience, the use of automated trading system is sometimes very successful. But in some cases, their performance is somewhat disappointing. The main trouble is that these systems can not judgment when the market has no tendency to speak of, and therefore can not make us timely exit. To measure a system of quality standards has two aspects, we should not only examined it under the trend of market profitability, and more important, should examine it under the trend of free markets to preserve the ability of financial strength. The inability of such systems to set up for themselves, which is their greatest weakness. In fact, it is also at this point, the famous filter, such as J. Welles Wilder directional movement index or commodity selection index come in handy. These filters can help traders identify which markets are best suited to a trend based system.

Automated trading system generally can not expect the market reversal, which is also its weaknesses. Conform to the trend of system on the trend to the end, to reverse the trend so far. They cannot judge the market when in long-term support or block level, when the deviation phenomenon swing index, or when the Elliott wave pattern wave 5 has clearly discernible. At the key moment, most traders will be alert and proceeded to partial liquidation profit. However, these systems at this time but still retain the original position, until the direction of the market to react completely change. Therefore, how to use the system. In order to obtain the maximum benefit, depends entirely on the user. That is to say, we must decide about whether to complete system by the nose, or combine them with other technical factors, the formation of comprehensive trade policy. Like this, we shall have to part, talk about how to bring the automation system to be used as a general technical indicators and blend to our predictions and the transaction process.
The automatic signal system integrated into analysis
In order to explain this question, here we intend to analyze trends in computer foot futures commodity Research Bureau launched the "(EFTA) as an example. This is an automated system can automatically produce the trend, buy and sell signals. The system of a number of technical factors together, including three moving average (10 days, 20 days and 40 days), price volatility, power index, and cycle time. It is connected to daily to obtain the data by computer. In the "CRB" page second futures chart service, the data published by week arrangement form, published on Friday. We will focus on these data.
Figure 15.15 is an excerpt from the "CRB" service chart, is one of the "computer trend analysis" as an example. The first two columns is the commodity name and the delivery month. The third column ("computer trend") is the trend, this is the most important content in this table. There are three directions: up and down, or horizontal extension. The fourth and fifth columns represents the current trend of the starting time and the initial price level. The table published in January 25, 1985. Please note that each trend has duration. For example, sterling, Deutsche Mark, Japanese yen and Swiss Franc since}1 months, is in a downward trend. This means that if the dealer system according to this way, so he has to do short 2 months. Please also note that the short-term government bond market since last year since July, has been "long" signal, this is the 6 month long trend. Like this market, it is the dream of dealers. We'll talk about the short-term government bonds.
Sixth columns and seventh columns ("support and resistance") also contains a very valuable information. These are the current trends in the direction of change in the price level. If the upward trend, such as the cocoa market situation, which is given the level of support. If the trend is down, such as the pound market situation, given the level of blocking. If the market is close to or more than a block level, then the trend to decline from the lateral extension. If the trend is sideways, as in the case of the corn market, it also gives the level of support and blocking. If the market closed to or exceeding the barrier level, then trend will be turned on, and if closed at or below the level of support, then the trend will turned down. The trend will not be reversed in the same manner, from rising to falling or rising. It must first be "horizontal extension" to the transition, and then start from here, and then return to the original direction or reverse. Therefore, there is no trend in the system to take into account the situation.

The system continuously in the city
Obviously, if dealers implement the system of instruction, when the upward trend is holding a long, when downward trend holds short; and when the trend to extend laterally, out of the market on the sidelines. If the dealer willing, can also be adjusted to this system, the continuous, is always in the city. We have a lot of ways. For long-term traders, you can always hold long positions, until now the downward trend reversal. In turn, can also hold short positions until the upward trend reversal so far. As a result, even if the trend has been transferred to the horizontal stage, traders remained in the original position under the trend of opening. Of course, this strategy may lead to massive losses.
We have to make a continuous way, the more aggressive style of trading. When the trend from rise to lateral extension, we not only flat back to the original positions, but also anti do open positions. If later the trend turned down, then we give the bears overweight. On the contrary, if the trend to decline from the horizontal extension, then we will not only flat back all short positions, but also a long position. If later turned on the trend, we give the Bulls overweight. In view of this, we on all systems, including the system, can be adjusted, to traders to adapt to the specific needs and personal preferences.
To restrain themselves using the system signal
We can simply take other techniques because of the turbulence of automated information system for signal verification. Even though we do not intend to use automated trading system, but the use of other various technical factors, we can still with its signal as a means of discipline and to assure themselves in more to the trend and stood on the right side. As long as the computer showed a tendency to rise, we should not open short position, as long as the computer showed a tendency to decline, we should not open long positions (fundamental analysis type traders also may wish to adopt a technology system as their transaction intentions filter or a touch device. This is a simple and easy way). Usually, the so-called trend is actually a judgment, then computer signals can in a certain extent, the traders from hesitation indefinite free. They can stop him into the so-called "top or bottom stuck stuck trap.
I'd be happy to show the support and blocking level of the computer on my price chart. In this way, I will be able to know where these Guan Jian's levels are in advance, where the change in trends may be. I also look at many other technical factors, such as the trend line, the support and blocking levels of the graph, and so on, which can be used as additional information to verify trends. Let us look at the short term government bond market as an example of this approach. By January 25th, the upward trend in the market has been for 6 months. In the next week, prices fell, worn out price changes followed the upward trend line. On Friday, February 1st, in the "technical review" section of the CRB chart service, I wrote:

　　This week in the long stop zone, Ji had urgently strong bear sale situation...... Thus, taking advantage of the increased break. On the March short-term treasury bonds, our computer trend in turn on Friday, down (since July 13th, has been a "rise"). In March the European dollar since September since October, taking advantage of the increased, has turned into "lateral extension". We adopt the trend of the computer to change the signal that the bull market has gone, the neutral market is coming.
What should be emphasized here is that if we only regard the computer trend signal as a general technical indicator, then it will be of great value. In the previous example, the two short-term interest rate market, followed by nearly two months, has been a slippery.
Alarm by system signal
We can also use the computer trend analysis as an excellent review tool to remind yourself to be alert to the current trend of change. Please note the trends shown in figure 15.15. In one of the third columns,
There are at least 7 market trends in the direction of change. On Monday morning, when traders fathom of various charts, as long as the sweep a glance at the table immediately able to pick a hole in 7 kinds of transaction object. By studying all the charts, we can certainly get the same conclusion. However, the computer makes this work fast, simple, and more authoritative.
To the system as a broad market indicators
Before the end of this section, we'll look at a number of interesting figures in the EFTA's daily study - market indicators. Including daily price rise in the number of contracts and daily price decline in number of contracts than (the total number of contracts in more than 200), daily rise of new high number of contracts and daily fell out of the ratio of the new low number of contracts, and the computer trend to up the number of contracts accounted for the percentage of the total number of contracts and so on. The first two indicators are similar in the stock market index futures market version. Although these two figures, up / down numbers and high / low digital, from the traditional, in the commodity market is not very common, but the field is also quite interesting, to be our further investigation and study, to determine their predictive value.

　　Taking advantage of the increased number of computer contracts than I love this index. Its percentage distribution from 0 to 100. It acts like a swing index, can determine the commodity market as a whole is overbought or oversold. From the historical data, when this number exceeds 70%, the commodity market is overbought, somewhat retracement. When the number is less than 20%, usually means that the market is oversold, bottoming out,
This figure is an assessment of the overall atmosphere of the market, to track the changes in the CRB index, is very effective.
Artificial intelligence pattern recognition
On the one hand, the computer provides us with a large set of fast, simple technical tools and indicators, greatly simplifies the analysis of the work. On the other hand, the difficulty of the work but also improve the analysts. Once upon a time, technical analysts as long as the master of several kinds of analysis tools can be competent freely, but now it also face up to 40 kinds of technical indicators. According to the study of cognitive psychology, it is generally believed that human consciousness can be difficult when studying the link between three or more variables at the same time. If four or more analysts also digest the technical indicators, maybe he'd be troubled. So, if we decide to track only three kinds of indicators, which are the three most suitable?
In our market analysis, the computer is almost entirely as a calculator. Its main function is to calculate data, display data and so on, which saves us time. However, if the computer can also explain all the results of its interpretation of the words, perhaps it will be more successful. That is to say, we should not only make full use of the computing power of the computer, but also fully develop its logical function. This is the so-called artificial intelligence (AI) and morphological identification (PR) content of the.
Artificial intelligence refers to the computer to imitate human thinking, with the "self-learning" ability to solve the problem of the program. At this time, the computer actually behave like a certain "smart" that xiang. It can judge the situation, make a decision, and learn from the mistakes.
Morphological identification refers to the process of the computer to learn how to predict the market and make the decision based on the classification of various indicators or factors. The term "form" is used here, with a variety of charts "form" that we described earlier, meaning not the same. The purpose of morphological identification is to combine all the technical indicators together to produce a "synergy" effect, rather than to deal with various factors in isolation.
The first step in pattern recognition is to select the best individual indicators from all the technical indicators. The next step is to pick one of the best indicators of the performance of the partner. The third step, find out the results of the most ideal combination of the three indicators. Down, will repeat the above steps, continue to add new indicators, until the increase of the new indicators can not improve the total score of the combination. In the testing process, we have to use two different sets of data, a group of learning data, a set of test data. The results obtained from the learning data must be verified from the test data. This technique, which uses two sets of different data to carry on the side test, avoids the so-called "curve self adaptation" phenomenon. This kind of phenomenon often becomes the reason that people criticize the test method of each kind of technical index, especially for us to carry on the experiment for the optimization.
The use of artificial intelligence and pattern recognition, we may be able to suit the remedy to the case, solutions to such tricks of all information technology penetration in Ichigo's problem. In the process of dealing with the conflict of technical information, we first use the computer to calculate all the technical indicators, and then for each specific environmental requirements, and choose the best combination. Such a solution is obvious, so why in this regard so far none too much achievements?? actually so far, this kind of research is still in the pure theory of the laboratory stage, has never been tested in practice. Its cost is high, and the performance of the computer is too high. In addition, even if we recognize the shape of the market, they are often unstable and need to be re tested. In this field, the Laden research group is walking in the forefront of research group. The main speaker of the group is its chairman, David Aronson.
Sum up
Above, we discussed the role of computer in the field of technical analysis of futures. We first briefly introduce the trac cornpu software (at present, it is the leader of the industry), introduced the existing variety of computer technology tools and their use. We discussed the pros and cons of two aspects of the automatic trading system, as well as the pros and cons of using the computer signal. Automated trading system on behalf of the futures trading of a "black box" mode, the user never need to understand the decision process, in fact, users can even is not at all clear that the system in the end what is involved in. Also some computer users prefer to host their own decision-making process, they put the computer signals and various indicators into their analysis process, by their own make the final decision. And this is the starting point of Trac cornpu.
There is no doubt that traders rely more and more on computer trading systems, especially the private and public funds that have gathered a large amount of money. This phenomenon has a huge impact on futures trading. Floor traders in the futures exchange are trying to overcome the computerized foundation. These huge funds, and even distort the ability of short-term market behavior is becoming more and more powerful. Popularity with the promotion of micro computer, a variety of technical analysis software, including data transmission of the "online", greatly improving the level of complexity of the ordinary traders trading means, leading to more short-term trading. Because of the popularity of computer terminals, dealers are very easy to obtain information on the day, so the day of the transaction is also increasingly popular.
We are not sure, this trend will eventually go where. But it is clear that the computer has brought a revolution in commodity futures trading. This is not to say that the computer simplifies the process of trading. On the contrary, in a sense, the computer makes our work much more difficult, and the reason of this chapter has been discussed. From all these facts, we come to an important conclusion. If a commodity futures trader has no chance of having the computer technology, then he is in a very bad position. Because all market participants have the same information as the same time, it is very difficult to win over others and make a profit from the market. In this case, if we don't have a computer's help, is equivalent to the hilt and handed the other competitors, make oneself greatly at a disadvantage. The computer Take things as they come. In the future, their performance will be better, the operation is more convenient, and the price is cheaper. However, we can not wait for now.
reference material
Computer technology is currently the most comprehensive analysis software is cornpu trac. The company in addition to providing advanced support network, each year around the country to hold lectures, training users, as well as to explain the latest development of its software.
Of course, we also have other information services. The stock and commodities technical analysis, technical analysis company published) is the best of a magazine, it is analyzed with a computer oriented, dedicated to provide the latest developments in areas related to the rapid development of. The magazine, which in addition to the computer technology is analyzed in terms of the articles published, the introduced the emergence of new computer software and hardware services. Futures can also be used for reference, but it does not lay particular stress on computer technology.
Wells Wilde's book is a must read for a systematic trader. Another "technical trading system for goods and stocks" may also be good, with the author Patel Charles (trading system research edition, 1980). In the book, Patel lists 82 trading methods, 65 of which are fully automated.
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