The Science of Active Trading with Predictive Analytics and Indicators

THE SCIENCE OF ACTIVE TRADING JUST MOVED TO A NEW FRONTIER

Machine Learning Predicts Where Markets Are Moving Next

As an Active Trader, you invest in deep analysis to spot trends the more casual observer can’t see.

That discipline and dedication is both entertaining and rewarding: you like the work of uncovering the path to profitable intraday trades.

Your analysis focuses on historical trends, lagging indicators, back testing your theories, so you can then predict if that pattern will happen again. That’s the way you get home runs.

But as an Active Trader, all you have to do is look at your percentage of trading successes over losses to know how effective those labor intensive analytical strategies are.

Lagging indicators don’t give you the same probability of success as leading indicators…

What is a leading indicator? It’s having and acting on foreknowledge to see the future before it happens. It is NOT the latest MACD twist paraded as a ‘leading’ indicator. See Figure 1 below to see how EOTPRO Developments charts leading indicators.

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Figure 1 – The green line is pointing in the direction the Dow is about to move to… sideways. The Stochastic shows the market is still moving up. The arrow is how a true leading indicator works to help the Active Trader select and time trades. This is one of 8 leading indicators.

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Figure 2 – A few minutes after the Figure 1 Screen Shot, DeepStreet’s pointing arrow has turned yellow, meaning caution, do not trade. The MACD and the Stochastic are still showing there is upward movement.

Statistics show that most Active Traders make their profits for the year from a few home run intraday trades. But if your capital didn’t stretch far enough to be trading on those few knock-them-out-of-the-park days, your year could turn red fast.

So you love active trading and want more secure, reliable profits.

Then you need leading indicators, so you have a new way to look at the intraday market that might increase your probability of success.

How do you get to see the future before it happens, in the form of a leading indicator? By using a supercomputer and Machine Learning to scan news alerts no one has yet. And no, it’s not the stuff of Hollywood or what scientists used to call Artificial Intelligence.

Before you read further, why should Active Traders care about what’s happening in Machine Learning and Artificial Intelligence (AI) today?

For the simple but profoundly rewarding reason that trading with today’s AI (Machine Learning) gives you a timing edge that some of the big traders have… but you, trading for your own account or small boutique hedge fund, could never afford on your own.

Let’s just plant this idea and then we’ll break it down. What if you had advanced knowledge of where a stock or the market was moving to next, up, down, sideways and at what price it is likely to move to in the next 3 minutes to 3 hours? And you knew the level of confidence of that prediction? This is a whole suite of leading indicators.

Yes, at a glance it would be immediately obvious to you what to trade, how to trade it and what the profit potential was. Would you want to use that tool to increase your chances of better rewards?

50 traders who’ve been road testing these leading indicators inside a platform called DeepStreet EDGE have confirmed it has changed their fortunes.

They didn’t have to spend months reading books to figure it out either.

But what leading indicators are they using and how does it work?

To recognize the significance of DeepStreetEDGE, you will want to know what Artificial Intelligence is and why is it so much more reliable than historical indicators at predicting market movements.

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So back in the day when we first started hearing about “AI” data scientists were just using advanced programming tricks. There really wasn’t anything artificial at work, as the programmer supplied all the intelligence to the system by programming the model.

But it sure sounded powerful. Their models did advance the power and capability of a computer to work with lots of data. But not powerful enough to predict the movement of stocks.

That is a really big data problem. You couldn’t assemble the right data in the right format, in one location for AI to effectively query the data.

When you model the question you want answered using the data available, in the old way of developing a solution, you were limited by the mind of the programmer.

That all changed a few years back when data scientists changed how they were thinking about the problem. They decided to Model the Mind, rather than just model the problem in light of the data sources.

Modelling the Mind enables AI to be capable of exploring everything about the world. As long as you provide data to train it so it learns to recognize the patterns you need as it examines all the variables, the machine ‘learns’ and can use the patterns it has recognized to make predictions.

However the AI model based on the world (the old problem mindset) becomes obsolete the moment it is finished: the world has moved on already.

The only hope to create intelligent systems is to have the system itself create and maintain its own model.

Continuously updating output, in response to sensory input. Now we are not limited by a single human mind to program a model.

Enter today’s AI: Machine Learning. It is NOT a subset of AI. It is truly artificial intelligence at work.

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Since 2012, Deep Learning, a Machine Learning technique, has made huge strides in sophistication in Image Understanding, Signal Processing, Voice Understanding, and Text Understanding.

Machine Learning doesn’t care about intelligent behaviour: it is focused on the accuracy of its patterns so that it’s output: predictions, are relevant and reliable.

Artificial intelligence cares about maximising the chance of success… not accuracy.

When it comes to predicting the movement of stock prices (leading indicators) you need accuracy you can trust. You don’t want to analyze the world of stocks in its historical form!

That just gives you lagging indicators on steroids and you are back to not knowing anymore about the future than history can predict.chi va piano va sano e lontano

You have to give the Machine the right base to learn from. In simple terms, it means you feed it news, show the machine what happened as a result of the news and increase its confidence that it can predict price movement better with the next piece of news. Then you multiply all that activity by thousands of news items every day.

You also need to aggregate those thousands of changes in price movement of every stock so you can make the prediction as to how all that news will move an entire index.

You are now talking about collecting all the inputs that affect price and movement so that Machine Learning can spot thousands of patterns and turn the patterns into predictions.

Up until now, this was an immense computation problem as a well as a data source problem. It is very difficult to get all the right input feeds that contribute to stock price movement… and house that data in one big location so it can be analyzed.

You can imagine the size of that hard drive.

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When you get disparate data sources, in the old problem frame approach, a data scientist had to organize and label all that data before any analysis could be done.

In Machine Learning, using natural language processing, the computer can move from one data source to another without the data needing to be labeled. It learns and broadens its model off of every bit of information… with the correct algorithms.

While the data and natural language processing side of the problem in analyzing stocks has now been conquered, the other side of the problem is where Machine Learning and leading indicator trading, is in its infancy.

How do you turn a Machine Learning pattern recognition prediction system into a stream of information that makes sense to the human in a way that they can immediately understand what it means, and then know what to do with the result?

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The User Experience, as this is called, turned into the bigger nut to crack. If you don’t have a graphical, easy to navigate, interpreter for the average human who has no Data Science credentials, you don’t have a way of extracting the value from all that Machine Intelligence.

A few Wall Street companies are now investing in startups to help them grapple with how to pose questions using Machine learning to see if they can predict macro trends for oil, for instance, using many variables.

Despite these investments, the bigger surprise for Wall Street has been how hard it is to find a way to interpret the Machine Learning results in a way that easily reveals what to trade and when to trade. 

It’s great that Machine Learning can be trained to give an answer. But if you can’t use that answer confidently to time entry and exit for the right trade, Wall Street traders can’t capitalize on that answer.

It’s really an exercise in futility.

But asking the question of big data has a big ‘cool’ factor, like when Watson, IBM’s supercomputer played chess and finally learned how to win after many games. Nice. But not profitable.

So where are we in terms of being able to use leading indicators to find the right trade before the stock has moved to a new price?

Back to DeepStreetEDGE. EOTPRO Developments has cracked this complex user experience interpretation problem, and is now able to deliver on the promise of Machine Learning… so the answer of what to trade is distilled from vast data into discrete actionable tradable strategies.

Getting to the bottom of this ‘user experience’ problem was no easy feat.

There were two failed attempts under the belt that gave EOTPRO Developments the insight into how to wrestle big data from 45 different sources, discover the patterns, back test predictions to prove accuracy and funnel all that down into a dashboard that presents the best trading opportunities.

Then the founders and their team led by active trader Bill Dennis, went eight steps further.

As Active Traders, the founders  didn’t just want to ask big data questions to uncover the sentiment of thousands of news stories. They wanted true predictive leading indicators to use for their own trading. And they wanted to put that power in the hands of people like themselves to give everyone a leg up on the system.

They wanted to give Active Traders an edge, so they did not have to rely on lagging indicators to select and time trades because it’s not a fail safe system. It’s just all that has been available up to now and what hundreds of trading research tools relies on.

You can’t buy what has yet to be built and tested.

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Historical trends, (lagging indicators), never got them the consistent, reliable results they wanted.

So Bill and his own team of data scientists and product developers started with the news. The markets move on news. Such predictive sentiment analysis on news and social media feeds is everywhere today.

Yet sentiment analysis does not inspire confidence to know what to trade and what the benefit of the trade will be in advance for a stock never mind an index, intraday.

The EOTPRO founders wanted to know:

• When to trade any stock or option in the Dow or top 100 stocks on Nasdaq.

• When to trade the Dow or Nasdaq futures or ETFs

• What price change to expect from the prediction before stepping into a trade.

• What level of confidence they could expect from the trade, based on the prediction.

• How long it would take to get to that price.

• When to get out.

• When not to trade at all.

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Figure 3 – DeepStreet EDGE prediction dashboard

With seven goals achieved, their eighth goal took a year of programming and testing to figure out.   Having succeeded where no else has to date, the EOTPRO team took on the last challenge.

There had to be a way to estimate the pace of momentum so that traders can track when the market is about to reverse or retrace AND how slow or furious the pace of that change will be.

When you are trying to do something that no one else has, and you don’t want to be just a little bit better, you want to deliver incredible value, far more easily than the current practice.

Kind of like the difference between adding a battery to a gas powered car as an innovation in energy use vs developing a reliable, attractive electric car that people really want to drive as a revolution in energy use AND the driving experience.

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EOTPRO could have focused on using Machine Learning to make historical pattern recognition (lagging indicators) more accurate.

Instead they said “we don’t drive looking in the rear view mirror, we look forward. We want to trade looking forward so we see where we need to go next… and what to avoid!”

Conquering the eighth prediction as to when momentum would stall and the market would reverse, almost didn’t happen.

All the work had been done on DeepStreet EDGE. It was delivering all seven leading indicators flawlessly. The beta subscribers were using it to trade and making better returns.

But the momentum indicator seemed random. It didn’t seem to point out anything in particular but a changing set of numbers from plus 4 to negative 4. As Active Traders love to do, everyone kept watching the patterns, noting what happened next and sharing their insights (The EOTPRO team has a vibrant Active Trader community that meets daily to select their trades using DeepStreet EDGE).

Then one day, the numbers came into focus.

It turns out that the EOTPRO’s algorithms fueled by machine learning had ‘learned’ to tell exactly when momentum and news were going to fade and stop fueling the direction of the Dow.

It just took the humans awhile to notice how the number sequences worked. The EOTPRO machine learning algorithms had already figured it out.

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Figure 4 –  DeepStreet EDGE dashboard and Dow Prediction and Momentum Indicator Chart

As EOTPRO’s commitment to the user experience was paramount, the numbers were soon turned into easy colored coded symbols that everyone could use to trade confidently.

In the end, CEO Bill Dennis notes that the hardest part of the project was building the visual analytics so that it made simple, easy, at-a-glance, sense to an experienced active trader. Very few active traders are data scientists. So without the combined expertise and collective intelligence of his team and subscribers, this project never would have succeeded.

With the Dow prediction completed, it was just natural the EOTPRO team of data scientists believed they would achieve the momentum prediction for the top 100 stocks in the Nasdaq index, despite it being an equally complex problem.

With the Eighth step completed, they keep improving the Active Trading experience so everyone loves to use leading indicators and will soon have the S&P index prediction conquered as well.

For seasoned traders, using the platform for futures and options trading has been a revelation as the old laggard indicators aren’t part of their daily trading routine unless they need to look up history.

Bill and DeepStreet EDGE’s user community set their sights on the future, following DeepStreet EDGE as it points to the next high, the next low or says it’s the wrong time to be trading.

EOTPRO’s tenacity and persistence is paying off. In fact, when Bill’s wife Shelly had 19 (and counting) profitable futures trades in a row over 3 weeks, based on DeepStreet’s prediction of where to enter and when to exit, they knew they had succeeded well beyond their goals.

That’s how far Artificial Intelligence has come. There is an intelligent machine that can predict what to trade, when to trade and how far a stock will move. DeepStreet EDGE knows where the markets will move next. And that’s all an Active Trader really needs to see, before everyone else does, at a glance.

DeepStreetEDGE is now ready for sophisticated Active Traders to road test for themselves. As a way to introduce it to the industry, EOTPRO is offering active traders a chance to try it out for free for 30 days, and see how to trade with leading indicators by joining the daily trading club.

To get  your 30 day complementary pass, just click the link to register.

 https://deepstreetedge.clickfunnels.com/allaccesspass

IS IT POSSIBLE TO MAKE YOUR TRADING RESULTS GREAT AGAIN? THIS IS THE STORY OF HOW RICHARD FOUND OUT HOW

Richard took another sip of his cold coffee as he scanned his four monitors willing his brain to focus on the hundreds of stories flashing by on his news feed, so he could find his next options trade.

Each screen was tuned to a different channel – news, stock analysis, his back testing chart analysis program and his brokerage account.

He sighed and tried to find another angle to relieve the pressure on his tail bone.

Richard was trying to turn over a new leaf. He was ready to start the next chapter of his trading career with new strategies for back testing and a revised list of trading rules. Since he’d lost his trading account last year, he was feeling a lot of pressure from his wife to get it together or quit once and for all.

He heard a knock on the door of his “office”… which was really his remodeled garage. No one usually dared bother him during trading hours.

The door opened as he turned to scowl at the intruder.

He saw his neighbor and his anxious-looking wife. Richard could feel the muscles in his neck contract.

“How’s it going Richard? Profitable day?” Kevin, his neighbor dabbled in day trading on days his other full time job as a portfolio manager at a bank let him.

Richard grunted and waved his hand dismissively. “Day’s not over yet.”

His wife cleared her throat. “Richard, honey, I think you’re going to want to know about what Kevin just saw down at the bank.”

“Yeah? What’s that? You guys printing money again?” Richard took a deep breath and decided to laugh at his neighbor. If he missed a trade because of it, so what. This must be important for them to interrupt him… Maybe.

“How do you think your trading would be affected if you could actually predict the price movement of a stock before it happened?” Kevin dropped this sound bite fast, so he could get Richard’s attention.

Richard’s body slumped in his chair. “What? Is that one of those news social media sentiment algorithms you’re talking about?” He glanced back at his trading screen, already losing interest.

“Nope. Richard, I saw the most amazing demo this morning that the bank’s portfolio managers are road testing. It literally takes news and figures out whether it’s going to move the stock, and by how much.” Kevin picked up his pace. “ And get this, it predicts with a level of confidence so you know whether to believe the prediction or not.” Kevin was now walking into Richard’s territory, towards the monitors. “You have to see this. I can totally see you getting way better results in a fraction of the time you spend now.”

“Seriously.” It was a statement, not a question. Richard allowed himself to get distracted, remembering when he used to get better results than his last month’s trades. He’d only eked out a small profit this year. And that was from a couple of fluke trades.

But he had put in a lot of late nights to get those results, much to his wife’s annoyance. He had to keep the faith.

“Can you login and show me right now?” Richard was already making room for another chair.

“Yeah, the bank got all of us access to a free trial. Nice perk, huh?”

“You already know how to use it after one demo?” Richard was now really interested and suddenly wary too. “This sounds too easy. Prediction is for data scientists and risk managers. Which clearly you are neither.”

Kevin sidestepped the swipe. That was Richard. “Look for yourself.” Kevin started typing. “Here’s the dashboard. See all these news alerts? Look at this one for EMC. You see it’s got a 76% confidence that it’s going to move $0.15 in the next 36 minutes. You could make money on that trade right? Except you see that yellow dot? That means caution.”

Figure 1 – Here’s what Kevin and Richard are looking at inside the DeepStreetEDGE dashboard.

Richard was trying to read everything he was seeing and listen to Kevin at the same time. “That might be a good option trade. It would depend on the options spread.” Richard was weighing in his mind what he wanted to do. He was already antsy, ready to switch over to his brokerage screen when the word ‘Uncertain”’ sunk in. “Kevin, what are you saying about that yellow dot?”

“Well that’s one of the powerful indicators of this platform. That yellow dot says “market is uncertain”.  It saves you from taking stupid trades when the algorithm determines that news and momentum are moving at cross purposes. Or there’s some kind of global macro event affecting the market. Whatever. But the important part is, you don’t take that EMC trade unless the dot is green and news is green.”

Kevin sure sounded confident after only just seeing the demo this morning.

“Green?” Richard blinked a few times trying to get what Kevin meant.

“See that news story on EMC? The type is green, meaning it’s positive news, according to the algorithm. See the one below that? NAVI. The type is red, meaning it’s a negative news story. You could short or place a put on NAVI, except that this news alert only has 38% confidence and… what else would stop you trading NAVI?” Kevin paused, wondering if Richard was still listening. So to determine that, he decided to pull something his boss did with him regularly… and his wife come to think about it. This little trick also worked well on his teenage son.

Kevin cleared his throat. “Ah, what else would make me not want to short NAVI?” Kevin asked a question to see what Richard did of didn’t take in. He crossed his arms, waiting to see what Richard would do next.

Richard was fussing with his mouse, feeling like he was treading water. Then suddenly the dashboard came into focus. “Oh, right, you said when the dot is yellow to have caution. You don’t trade… for some reason… about the news.” Richard was now quite fascinated and pleased with himself that he got it. “No NAVI, no EMC.”

“And no unnecessary losses as a result of the advanced warning you are getting that there is pressure on the Dow. That yellow dot isn’t something other traders have, but you do, by using this platform. Well, actually, I do, because I’ve got the free subscription to DeepStreetEDGE.” Kevin smiled. “You don’t.”

Richard leaned back in his chair and nodded. “Pretty slick. So what else does this thing do?” He’d forgotten all about the trade he was waiting to select so he could test out last night’s rule revisions.

Kevin smiled ready to show him the most amazing part of his new discovery. He clicked on another tab and up came the day’s Dow chart. “See that green line sticking out in front of the chart line? That’s the direction the algorithm is predicting the Dow will move to next. They say you should only trade when the Dow is moving in the direction of your anticipated trade.

Figure 2 – DeepStreetEDGE’s Dow Chart predicting where the Dow will move next. A great tool for Futures traders.

“Look at that, the Dow is Green now. Meaning the market is moving up. See that blue line down below? The higher that goes the more the market is being affected by events the algorithm can’t predict. The minute that blue line drops, you can trust the trade again.”

Kevin was working hard to download everything he learned this morning, before Richard lost interest again.

“You see that yellow line just before the Dow went up? That was a great predictor that the Dow was going to change direction. Having that advanced warning shows you when to get in a trade or a futures contract because you can see the pull back about to happen and you wait for that and then get in.”

Richard shoved his glasses higher up his nose. “Now that’s impressive. And look the dot is green and the market just did a pullback. It’s the perfect time for a trade, if what you’re saying is true. What trade should I take?”  He turned away from the platform back to his old news analysis screen.

Kevin stood up. “No, no, no. Richard, you don’t need all that anymore. Reading news feeds is your big time waster. Let’s go back to the dashboard and see which news story is worth paying attention to. Or take a Futures trade.”

“See, the Machine Learning algorithm does all that predictive analysis on the news alerts for you, so you don’t have to… and you don’t pick trades that are going to empty your bank account.” Kevin turned Richard’s chair back to the Dow chart and clicked on the Urgency tab.

He turned to Richard’s wife and gave her a big reassuring smile.

Figure 3 – HRTG was predicted to drop by $0.31. The red line on the chart shows when the alert was called, and what happened to the stock during the time period of the prediction. The predicted target was achieved.

 

Richard stared hard at the dashboard. “Geez, the market has started dropping again. Red dot. Red news headline. 100% confidence. I’d buy puts… Wait. It says ‘Target Hit’. I missed a good one already on HRTG. What’s the next trade?”

Kevin laughed. “You understand algorithms and Machine Learning like a pro already. We just wait till the nice British lady chimes in with a new news alert, curated for your trading pleasure.” Kevin picked up the weighty trading strategies book Richard had been looking at. “ You can read all this in the meantime, if you want.”

“News alert.”

Richard sat bolt upright and elbowed Kevin out of the way.

PG. Gillette unveils “perfect isn’t pretty” campaign.”

He went straight to his brokerage screen and examined the options spreads. “I’m taking that one. Done. Let’s see what this thing can really do.”

Figure 4 – DeepStreetEDGE algorithms have given this news alert an 85% probability that PG will move $1.38 within the next 44 minutes.These indicators are just 3 of 8 predictive indicators powering DeepStreetEDGE.

Richard’s heart was racing. What if this trading tool really did bring home the bacon. He really needed a home run this week or his results were going to be negative for the month. And negative at home.

“Ah, Richard… according to the guys doing the demo, there are a few things that you would want to double check before you ever leap into a trade just based on a news alert…”

Richard could feel the coffee burn in his heart. “Like what?” Are you telling me I just took a bum trade? I should never have let you in here.” Richard was back at his brokerage screen scanning his profit and loss.

Kevin and Richard both leaned into that screen squinting till they saw the green in Richard’s account 10 minutes later.

Richard breathed a sigh of relief.  “Hey, you don’t say. Look at that, the stock is up $0.10. I’ll take that.” And he hit the sell button in the next instant, feeling immensely relieved. Up into the triple digits for the month, finally.

Figure 5 – PG was predict to move within 44 minutes. At 41 minutes it had moved $0.10 and had still further to go, with 85% confidence.

Adrenaline surged. Richard forgot that Kevin was even there.

“I’ll accept an apology at this point.” Kevin had his arms crossed “And a bone of gratitude.”

“Hey man, I thought I was going to lose out again.” Richard then mumbled “Sorry.”

Let me show you how to work the rules on this thing so we don’t do that knee jerk trading again.” Kevin took out a single sheet of paper the demo team gave him. Then he refreshed himself on the list so he could take Richard through the finer points of trading with knowledge of the future, rather than relying on history to predict the future.

Richard’s jaw dropped. “One page. That’s all they give you to figure this thing out?”

“You just saw it for yourself Richard. How hard was it to figure out what trade to get into and when to get out?”

Richard picked up his trading strategies booked and threw it on top of the bookshelf with all the others he had amassed.

Ten minutes later, the two of them decided to get some fresh coffee so they could spend the rest of the trading day making use of the fact they now knew more than most traders on Wall Street about where stocks were moving next.

Richard, for the first time in a long time, had a good feeling that he was about to make his trading results great again.

If you would like to try DeepStreetEDGE and get the same deal that Kevin got, thenvisit here to find out how to get it. And make sure to register for the webinar so you can see DeepStreetEDGE in action, for yourself.

Immediate 30 day free access: https://deepstreetedge.clickfunnels.com/allaccesspass

Do Your Trading Rules Still Get You The Results You Want? Maybe It’s Time To ReThink How You Select Your Trades

As a seasoned intraday active trader you know the importance of developing and working your plan so that you stay out of the danger zone where you risk losing your investment capital and possible your account.

You’ve probably read most of the books out there and will work hard to make sure you make at least some money on every trade.

But do you follow the right rules at the right time to ensure you are always protecting your capital in balance with trading for profit? According to Investopedia, active traders can fall into potholes when they don’t follow these 20 rules that keep you safe, disciplined, in control and as a result successful.

Very wise advice to follow if you are an Active Intraday Trader who intends to be stay active for the foreseeable future.

But some of these rules are really hard to follow without a net: every trade can feel like walking across a canyon on a tightrope.

These rules are supposed to make your trading safer… but you are still on a tightrope… one wrong move and it’s over.

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Now some people like that adrenaline rush, especially the part where you make it to the other side, intact, and better off for having taken the risk.

What if you could reduce some of that ‘one wrong move’ risk and still get the adrenaline high from making it safely to the other side?

There is a solution. It’s called DeepStreet EDGE and it gives you something that very few traders have at the moment: predictive insight into where the DOW and stocks are moving to in the next 3 minutes to 3 hours.

How? Artificial intelligence and Machine Learning. Yes, a supercomputer is now able to look at thousands of news stories daily, that have yet to be released to the web, so you know IN ADVANCE, which news alerts are about to move stocks and the indices.

It used to be that only big hedge funds and investment banks had the cash to invest in data scientists to use artificial intelligence. But today, even the little guy has affordable access to a platform that does a lot more than just predict price.

When you can predict the future before news is priced into a stock, you see opportunities and take advantage of them before most people even finish reading a single news story, nevermind thousands of stories.

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What’s the new game? It’s called DeepStreet EDGE and it uses Machine Learning and proprietary algorithms to interpret how news will affect the price of the stock, which direction it will move, by how much in the next 3 minutes to 3 hours and then it predicts the level of confidence it has about it’s own prediction.

Trading with that kind of advanced notice is like adding a bridge under your tightrope: you are not going to fall very far, and you will get to the other side of that trade intact.

As a confident trader, you have tried and tested trading strategies and a mindset that lets you enjoy the spoils of your efforts. DeepStreet EDGE takes your trading to a new level of satisfaction and reward.

So how does Investopedia’s rules to live by as an active trader change if you have DeepStreet EDGE supporting your trade selection and trade timing?

Let’s point to the most obvious risk reducer first: The more you rely on history to attempt to predict the direction of the market, the more rules you need. While you’ve relied on historical trends for years, history is a poor predictor of future price, movement or results.

We don’t drive forward looking in the rear view mirror.

Or as Wayne Gretzy famously said…

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DeepStreet EDGE helps you do what Gretzky does: know where the stock is going to move next, by how much so you can hit the right trade at the right time.

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How’s that for risk reduction.

So let’s see how DeepStreet EDGE changes the risk/reward of Investopedia’s rules so you can simplify your trading, reduce your risks and get to results faster.

  1. Follow Your Discipline – Investopedia says “You can’t trade without discipline and self-control.” That’s true. It also helps to have a system that is patently obvious what to do and what not to do, for those days when taking a flyer seems like a good idea. If you know discipline and you are not best friends, then a prediction engine like DeepStreet EDGE is going to be a far better fit for your trading style. When price and news momentum are not going your way, it shows you a bright yellow caution sign, which we suggest means don’t trade. Now that is easy to follow.
  2. Lose the crowd – Investopedia says “Long term profitability requires positioning ahead of or behind the crowd, but never in the crowd because that’s where predatory strategies target. Stay away from stock boards and chat rooms.” Absolutely, but how are you supposed to know where the crowd is? You need a reliable trade selection system that keeps you ahead of the crowd so you’re in and out before the crowd makes its play. You see exactly which news alerts are worth trading and what to ignore, at a glance. So there’s no need to go fishing for ideas from people that have no true predictive ability.
  3. Engage your trading plan Investopedia says “Update your trading plan weekly or monthly to include new ideas and eliminate bad ones. Go back and read the plan whenever you fall in a hole and are looking for a way to get out.” Yup. Still need this rule when using DeepStreet EDGE.
  4. Don’t cut cornersInvestopedia says “Your competition spends hundreds of hours perfecting strategies and you’re in for a rude awakening if you expect to throw a few darts and walk away with a profit.” So do you want to trade more, or research more? DeepStreet EDGE’s perfected algorithms have a 70% accuracy rate predicting the direction of stocks. No need to spend hours finding trades. Spend the time using your trading strategies before your competition even knows what to trade.

  1. Avoid the obvious – Investopedia says “Profit rarely follows the majority. When you see a perfect trade setup, it’s likely that everyone else sees it as well, planting you in the crowd and setting you up for failure.” Traders who use lagging indicators get stuck in the crowd. Artificial intelligent trading, like DeepStreet EDGE means you find the right trade at the right time at least 20 minutes before the majority even gets any news about a stock, never mind figures out what how to trade the news.
  1. Don’t break your rules – Investopedia says “You create trading rules to get you out of trouble when positions go badly. If you don’t allow them to do their job, you’ve lost your discipline and opened the door to even greater losses.” This is true no matter what advantage you’re using. DeepStreet EDGE makes those trading rules immediately obvious so they are hard to miss.
  2. Avoid market gurus – Investopedia says “It’s your money at stake, not theirs. Keep in mind that they’re probably talking up their positions, hoping the excited chatter will increase their profits, not yours.” You want actionable trading ideas. With DeepStreet EDGE, it’s artificial intelligence, the supercomputer sifting through thousands of news alerts so you see only high probability trading ideas, not market gurus.
  3. Listen to your intuition – Investopedia says “Trading uses the mathematical and artistic sides of your brain so you need to cultivate both to succeed in the long run.” Absolutely true… and your intuition can get crowded out with too much input pulling you in multiple directions. With advanced knowledge of where a stock or an index is moving next, you can hear your intuition. No need to listen to the overwhelming masses.
  4. Don’t believe in a company or a product – Investopedia says “If you’re too in love with your trading vehicle, you give way to flawed decision-making. It’s your job to capitalize on inefficiency, making money while everyone else is leaning the wrong way.” The only way to not lean the same way everyone else in a trade, is to know in advance, before the masses, that a price move is about to happen. That is the perfect time to capitalize on inefficiency. To do that you have to believe in yourself first then use your trading edge tool to take the right action. If you would like to try trading with that kind of advanced knowledge, you can get 30 day complimentary access by clicking here.
  5. Get your personal life in order – Investopedia says “Whatever is wrong in your life will eventually carry over into your trading performance. This is especially dangerous if you haven’t made peace with money, wealth and the magnetic polarity of abundance and scarcity.” So true. Getting an edge lessens the risks you take. Then you know you’re trading for the right reasons, not just to prove to anyone that you can do that highwire, “no net” act. You have to ask yourself what is more important: getting rewarded for your trading strategies or proving you can walk the tightrope.

  1. Don’t try to get even Investopedia says “Drawdowns are a natural part of the trader’s life cycle. Accept them gracefully and stick to the time-tested strategies you know will eventually get your performance back on track.”Being able to calculate risk BEFORE you trade means you have to speculate about which direction the market is about to move. DeepStreet EDGE shows you plainly, at a glance, so you can see the trend about to materialize, and either capitalize on it, or wait till the retrace occurs, then get in. That’s how you stay on track without taking a hit.
  2. Pay attention to early warning signs – Investopedia says “Big losses rarely occur without multiple technical warnings. Traders routinely ignore thosesignals and allow hope to replace thoughtful discipline, setting themselves up for pain.” This rule is all about discipline winning over emotional needs to feel ‘right’. The disciplined trader listens to their emotions, and then checks their indicators to validate the direction or rethink their hunches. Regardless of whether you bank on historical patterns or want to trade with predictive artificial intelligence, paying attention to what the indicators tell you is job one.

  1. Don’t confuse execution with opportunity – Investopedia says “Traders make up for insufficient skills with expensive software, prepackaged with all sorts of proprietary buy and sell signals. These tools interfere with valuable experience because you think the software is smarter than you are.” So when using artificial intelligence to guide your trade selection, is that supercomputer smarter than you are? Let’s be frank: yes and no. Rule 13 still applies. The confidence rating of a particular news story in DeepStreet EDGE is there to guide you, not to tell you what to do. Bottom line, it’s your money, your decision. The tools just help you narrow down your options so the probability of your decision being successful is higher.
  2. Play with your head, not over itInvestopedia says “It’s natural for traders to emulate their financial heroes but it’s also a perfect way to lose money. Learn what you can from others, then back off and establish your own market identity, based on your unique skills and risk tolerance.” Great advice. Use your tools. Then make your own decision that fits your plan to preserve and maximize your capital.
  3. Forget about the Holy Grail – Investopedia says “Losing traders fantasize about secret formula that will magically improve their results. In reality, there are no secrets because the road to success always passes through careful choice, effective risk management and skilled profit taking.” While artificial intelligence gives you a leg up other traders don’t have because it predicts the future and others are using historical trends, it does not replace making smart choices.
  4. Ditch the paycheck mentality – Investopedia says “We’re taught to grind through the work week and then pick up our paychecks. This pay-for-effort reward mentality conflicts with the natural flow of trading wins and losses during the course of a year. In fact, statistics indicate that most annual profits are booked on just a handful of days the market is open for business.” This investor mindset is essential even when you trade with artificial intelligence. The difference between using traditional indicators and DeepStreet EDGE is that theopportunities for success are immediately obvious no matter what direction or pattern is occurring in the market. So your success may run contrary to the statistics when using predictive LEADING indicators such as those in DeepStreet EDGE.
  5. Don’t count your chickens – Investopedia says “Feel good about a trade that’s going your way but the money isn’t yours until you close out. Lock in what you can as early as you can, with trailing stops or partial profits, so hidden hands can’t pickpocket your success at the last minute.” Preserve your capital. If you have a trading plan and follow your goals using a trading platform that shows you things are moving against you, before they actually do, your chances of seeing that profit in your account increases dramatically.
  6. Embrace simplicity – Investopedia says “Focus on price action, understanding that everything else is secondary. Go ahead and build complex technical indicators but keep in mind their primary function is to confirm or refute what your trained eye already sees.” It’s not historical patterns that move price. News and momentum is what moves price. DeepStreet EDGE points you to exactly those stocks where news is ABOUT TO move price, so you can get in and get out, BEFORE momentum is lost.
  7. Make peace with losses – Investopedia says “Trading is one of the few professions where losing money every day is a natural path to success. Every trading loss comes with an important market lesson, if you’re open to the message. In other words, learn as much from your mistakes as you do from your wins. Inside DeepStreet EDGE, the trading rules are easy to follow before you get into a trade and immediately after you get out. Review, review, review.

  1. Beware of secondary reinforcement – Investopedia says “Active trading releases adrenaline and endorphins. These chemicals can produce feelings of euphoria even when you’re losing money. In turn, this encourages addictive personalities to take bad positions, just to get the rush.” How does this work?  Dopamine, another brain chemical, builds up in your body when you are anticipating your trade. That’s what feels exciting. It is an addictive feeling. But dopamine falls off just after you make the trade, before you know how it turns out. The excitement fades away before you get results. And then you want more. If you know that those healthy brain chemicals often affect your decision making making you trade more than is safe, then you know it’s important to work with tools that keep you focused on a good outcome, smart and present, rather than ruled by dopamine.

What’s Your Best Next Step?

If you like to analyze your trades, follow your plan and work with the latest innovation so you trade safely, securely, often with a higher probability of profits, then artificial intelligence may be the right direction for you to take next.

The best way to determine if this is a good strategy for you is to try out the platform for yourself. EOTPRO is offering a complimentary 30 day pass to DeepStreet EDGE. You get full platform access to select your trades and time your entry, you also get full training by joining the trading club room that runs Monday to Friday, for the first two hours of the US trading day.

Want to understand the technology behind DeepStreet EDGE and how it differs from traditional, historical lagging indicators?

DeepStreet EDGE is for experienced, active traders who trade options, futures, stocks and indices.

DeepStreet EDGE is a predictive analytics tool, not attached to any brokerage’s trading platform. Each subscriber has to have his or her own brokerage account.

EOTPRO is not a licensed broker dealer. We do not provide trade recommendations. All trades are selected and made at the sole discretion and responsibility of the subscriber.

Can You Still Trade Intraday In A Volatile Choppy Market

2016 has already been a tough year for intraday traders. In the last three months, the news cycle and global macro events have set up a narrow trading band, that most days is hard to read.

Have we hit a ceiling? Are we in a bubble? Are we about to enter into a deflationary cycle that is only on hold because of central bank rate easing? Will Trump de-stabilize world markets? Will oil prices jump back up or just drift sideways?

Should you be monitoring these situations or stop the distractions and just look for patterns? It can be a tricky time for the intraday trader to correctly select and time trades.

In this type of volatile market, lagging indicators like moving averages, MACD, RSI and Bollinger Bands are not reliable.

Instead, focus on news. How come? The news cycle is the significant factor in driving these stock price fluctuations. So you can’t ignore it.

But tracking the relentless stream of news and then calculating how any news item affects any particular stock or index, in time to benefit from the analysis, is beyond the average brain to compute.

So if we intraday traders should follow the news, but can’t make sense of the data that’s actually highly correlated to moving prices, and technical indicators are not useful in this choppy market, what is the alternative?

Enter the age of artificial intelligence and machine learning where a supercomputer can do all the heavy cognitive lifting so traders can immediately realize which news alerts are most likely to move price, in advance, before it actually happens.

DeepStreet EDGE is powered by such a supercomputer.https://deepstreetedge.clickfunnels.com/allaccesspass

Even in a choppy volatile market affected by global macro events, the way the alerts are presented to the trader makes specific news immediately actionable. It is obvious what direction an index, or a stock is about to move and how long it will move that way.

To understand how it works, refer to the figure below. DeepStreet EDGE’s NASDAQ chart on May 31, 2016 shows how volatile the market was that day, as choppy as it has been most days since March.

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Specifically, the real time chart above shows that DeepStreet EDGE is signaling a yellow dot, and a yellow line sticking out from the last price, meaning that it is likely unsafe to trade. The yellow line is pointing in the direction the market is about to move next – sideways, slightly trending up.

Yellow means that news pressure is diverging from momentum: the counterforce of pushes the market sideways.

The light red lines in the chart above reflect the bearish news of the day. At the start of the day there was more Red news, than Green (Green lines shows bullish news). Yet despite the light green news coming out at 8:30 AM, when a trader might have gone long, the market was also showing yellow meaning the supercomputer is warning that the market is too volatile to trade.

To make a successful trade in this market, you would wait until the Pointer showed Red, to short a stock or the index, or Green to go long. As you study this chart, you see that trading with DeepStreet EDGE helps preserve your capital.

https://deepstreetedge.clickfunnels.com/allaccesspass

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On the DOW chart above also from May 31, the pointer is Green. Notice that the base of the pointer is where the index is at the moment. The steep angle of the pointer means the supercomputer anticipates a high probability the index will move up, finally breaking it’s sideways chop that has plagued the market since 9 AM.

The lighter green pointer and lines indicates that it is the news stories in the right column that are pushing price. This observation comes after several hours where macro global news events (grey lines) were affecting the Dow.

When the pointer turns Green and sharply up, DeepStreet EDGE is suggesting that it could be an ideal time to take a futures trade, BEFORE the market has retraced up.

Or take an option trade on any of the Green news alerts on specific stocks, shown in the right hand column. The percentage number leading the news alert shows the supercomputer’s statistical probability the stock will move to a specific price within the next 3 minutes to 3 hours.

Try DeepStreet EDGE and see for yourself how the supercomputer can make trading in a choppy uncertain market far more enjoyable and rewarding, you can start a free trial for 30 days by signing up here by clicking this link.

https://deepstreetedge.clickfunnels.com/allaccesspass. Your trial includes access to the daily trading club so you learn how to interpret the signals by watching the head trader use DeepStreet EDGE for his own account.

What Traders Are Using Now To Select & Time Trades… With 73% Accuracy

If you are an active trader today, and were trading ten years ago, you might have noticed that your tried and true indicators are not delivering near the accuracy they used to.

You are now trading at a risk level that’s higher than you might want.

Time to re-calibrate.

Is it because you haven’t back tested often enough?

Is it because you haven’t found the right combination of indicators that signal you to find a trade faster or get out quicker?

Is it because it’s taking you longer to recover from the last trades that did not give you the results you were looking for?

You might want to STOP looking in the mirror for the right answer, even though every good trader does it.

In this case, it’s counter productive and keeps you in the dark about what’s really going on.

What you use to find and select trades doesn’t meet the bar anymore, even if you are professional trader, have ten or more years of experience or are in charge of managed futures or trade for your clients.

How come?

It’s because of the combined effects of algorithmic trading and high frequency trading.

Yes, you are aware of these volatility drivers. So what about it?

What you might not know is how much these two technical trends disrupt the accuracy of the MACD, Bollinger Bands, RSIs, Moving Averages and well… any combination that you’ve tried.

Just look at your results over the last ten years to see if you notice a trend.

Look into the void

The sad truth is that the human brain doesn’t operate at bullet train speed to out-run the algorithms driving trades today. They’ve come and done their trading just before you’ve got the signal something is worth paying attention to… and the price has changed but you don’t know that.

Chilling isn’t it.

If you want to know how to level the playing field, even if you are an individual trader, or a managed futures trader working on behalf of your clients, you might want to read further.

Or join me for an online workshop to show you how a select group of US equities, options and futures (equities only) traders are discovering a whole new experience selecting and timing their trades with something called Machine Learning. The accuracy rate is quite comforting.

Free Trial here: https://deepstreetedge.clickfunnels.com/get-the-edge.

Curious About Machine Learning And Why It Beats the MACD?

You can read more about why Machine Learning can out pace even algorithmic and High Frequency Trading below.

Artificial intelligence (AI) has been a big player in Hollywood style science fiction for decades. But now it has made its debut on Wall Street.

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Known as Predictive Analytics, a supercomputer today is actually able to determine what price and direction a stock or an index is about to move to next. The output provides a true leading indicator.

MACD, RSI, Bollinger Bands and Moving Averages are all lagging indicators, meaning you are hoping that what happened in the past will happen again and you will be alerted by these signals to know the exact time to enter a trade.

The Bad News Is That History Is A Poor Predictor Of Future Action.

The good new is that today, you don’t have to look in the rear view mirror any longer to regain your success as a trader.

To evaluate this statement, it is useful to understand how Machine Learning works.

Artificial intelligence was a nice idea in the beginning: the concept that a computer could learn on it’s own. There really wasn’t anything artificial at work, however, as the programmer supplied all the intelligence to the system by programming the model.

The model was powerful; But not powerful enough to predict the next movement of stocks.

Predicting Stocks And Index Movement Is A Gigantic Big Data Problem.

Programmers couldn’t assemble the right data in the right format, in one location for AI to effectively query the data.

The second problem was the model itself. When you model the question you want answered using the data available, you are limited by the mind of the programmer.

new generation

That all changed a few years back when data scientists changed how they were thinking about the problem. They decided to model the mind, rather than just model the problem in light of the data sources.

Modeling the mind enables AI to be capable of exploring everything about the world.

As long as you provide data to train it so it learns to recognize the patterns you need as it examines all the variables. Then the machine ‘learns’ and can use the patterns it has recognized to make predictions.

However the AI model based on the world (the old problem mindset) becomes obsolete the moment it is finished: the world has moved on already.

The only hope to create intelligent systems is to have the system itself create and maintain its own model: Continuously updating output, in response to sensory input.

With this technological leap, we are not limited by a single human mind to program a predictive model of how stocks and the indices are about to move to a specific price.

Enter today’s AI: Machine Learning. It is NOT a subset of AI. It is truly artificial intelligence at work.

Machine Learning Doesn’t Care About Intelligent Behaviour: It Is Focused On The Accuracy Of Its Patterns So That It’s Output, Predictions, Are Relevant And Reliable

When it comes to predicting the movement of stock prices (leading indicators) traders need accuracy they can trust.

Traditionally, traders have looked backwards, using technical analysis to isolate patterns to ‘predict’ what will happen next.

But to be truly predictive and to get the most out of Machine Learning, you don’t want to analyze the world of stocks in its historical form!

That approach just gives you lagging indicators on steroids and you are back to not knowing any more about the future than history can predict.

You Have To Give The Machine The Right Base And Data To Learn From. What Is The Primary Mover Of Stock Prices? News.

In simple terms, it means you feed it vast streams of news. Then show the machine what happened as a result of the news. This feedback loop increases its confidence that it can predict price movement even more accurately with the next piece of news.

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Figure 1 – DeepStreet EDGE (a Machine Learning Platform) predicting the direction of the NASDAQ on June 27, 2016, the Monday after the Brexit vote. Trading when the indicator (green line pointing up ahead of the current price) changes from yellow to green or yellow to red tells you the ideal entry point for a futures or options trade.

Then you multiply all that ‘learning’ activity by thousands of news items every day and that’s how the platform builds it’s accuracy.

If you want to see how this Machine Learning platform really works, you can join us for a free trial here. Your trial includes access to the daily trading club so you learn how to interpret the signals by watching the head trader use DeepStreet EDGE for his own account.

You also need to then aggregate those thousands of changes in price movement of every stock so you can make the prediction as to how all that news will move an entire index.

You are now talking about collecting all the inputs that affect price and movement so that Machine Learning can spot thousands of patterns that humans can’t, and turn the patterns into increasingly accurate predictions.

Up until now, this was an immense computation problem as a well as a data source problem. It is very difficult to get all the right input feeds that contribute to stock price movement… and house that data in one massive location so it can be analyzed.

When you get disparate data sources, in the old ‘problem frame’ approach, a data scientist had to organize and label all that data before any analysis could be done.

In Machine Learning, using natural language processing, the computer can move from one data source to another without the data needing to be labeled. It learns and broadens its model off of every bit of information… with the correct algorithms.

While the data and natural language processing side of the problem in analyzing stocks based on news as input, has now been conquered, the other side of the problem is where Machine Learning and leading indicator trading, is in its infancy.

How do you turn a Machine Learning pattern recognition prediction system reading news into a stream of information that makes sense to the human in a way that they can immediately understand what it means, and then know what to do with the result?

In the next post in this series, we will discuss what turned out to be the much bigger problem to solve and what it means for trading today with predictive analytics.

So How Does Machine Learning Level The Playing Field For The Active Trader?

We will leave you with this idea: Algorithmic Trading and High Frequency Trading instructions use lagging indicators to search and time their trades… just like you do.

They just do it faster than you.

Machine Learning Predicts The Future… Acting Long Before The Algorithms And HFT Instructions Ever Get To Follow Their Instructions

Trading with Machine Learning is how you beat them at their own game.

To experience machine learning in action visit http://www.eotpro.com or sign up for  free trial here: https://deepstreetedge.clickfunnels.com/allaccesspass. Your trial includes access to the daily trading club so you learn how to interpret the signals by watching the head trader use DeepStreet EDGE for his own account.