generics

Recent updates

Recent updates

Under the usual code revision, I sorted ut with a small modification of the training set that seems to have a large impact on the stability of the neural networks in the model. And also in our trading behaviors. I was able to find some interesting patterns in the data, that show that it is possible to reduce a bit of profitability for more reliable information This is why we need to make sure that the training set has enough accuracy.

As I wrote, the difference is tiny, just 1 bar. All training positions have been adjusted. We now have a more reliable set of predictions and the most affected indicator is probably the rV.Target. It was estimating the maximum extension of the move. It now represents the level that when cleared gives a start to the close position procedure.

There is a small (averaged) loss in presumed profitability, compensated by what should be a more reliable set of previsions.

As you know, I do not backtest anything, so let’s see how it preforms in the real world.

Posted by Luca in free, generics, indicators, model insights
The making of reality

The making of reality

Lately, I came across a weird and disruptive idea: some scientists that study the human mind have determined that we do not see what “enters” into our eyes, but instead we “project” through our eyes what our brain is expecting to see. Some scientists call this holographic reality and this process can easily explain some difficult-to-be-accepted aspects of our common experience, as we often do not see something unexpected, or, on the opposite, see just the details we already know (in a person, in a picture, in a text or in an event).

No need to say that if you apply this process to the trading and investing activity it is somehow explosive: yes, we all project our knowledge of the markets into our expectations and then we fund on our opinions to trigger decisions. And we all make mistakes, as our decisions are what we want to see in the market, what our minds project on the reality and we think that this is reality. Delusion is just behind the corner.

Is there a solution? Yes, more than one. You must train your mind to be as free as possible and to accept every possible aspect of reality. Accepting does not mean embrace, but recognize. You must study your field of interest and collect any point of view, slowly building your own. Always take note of the opinions you do not share. In the field of trading, you may use some agnostic techniques as technical analysis – that is not foolproof – to reduce some macroscopic errors. And then you can take profit from artificial intelligence tools, that, if well designed, offer an unbiased view of reality through pattern recognition. It frees you from the necessity to always have an opinion on everything (such a burden!) and so your mind is much less solicited, calmer, more open to recognizing reality as it is.

Posted by Luca in educational, free, generics, psychology
The New Blog

The New Blog

spxbot.com has a new blog: new address https://blog.spxbot.com, new graphic layout and new content: a better selection of the old posts that will be updated whenever necessary. Navigation should be easier than before, readability has been improved and I hope you will like it.

The whole spxbot website is under refurbishment, with the aim to point to just the focus of its existence: let you access quickly and easily to the forecasts of the S&P 500 index by r.Virgeel.

Happy navigation!

Posted by Luca in free, generics, 0 comments

Video by Martin Armstrong

I have to thank this man, again. For two reasons, mainly: first, because his writings were the eye openers to understand the markets and how they work, even after many years of investing activity. Second, because without the “it’s all interconnected” message, I would have not tried to experiment with the artificial intelligence model that powers r.Virgeel. It’s always a pleasure to hear him, and here he explains so clearly why the euro is going to fail and why we have to stop thinking linearly if we want to succeed as traders/investors.

Good vision!

Posted by Luca in free, generics

Weapons for resolute traders

If you occasionally read this blog, you may have noted that I often say that r.Virgeel is not a trading system. I want to warn the newcomers that they will not find any automatic fount of wealth here.

Any serious trader has matured its activity in a deeply constructed attitude: call it a plan, or a set of rules, or a set of indicators or all these things together. Traders hate losses like cats hate water: sometimes you need some, but better avoid. So, they build their framework, each one different, each one influenced by the history of each trader itself.

When I first designed the model that will become r.Virgeel, my trading experience was at the “trade-with-technical-analysis-the-fundamentally-chosen-stocks” stage. Many experiments started with sets of t.a. oscillators and were largely unsatisfactory. It took time to understand that I might ask to the model “impossible” answers.

What I understood is that I must ask the model “impossible” answers, otherwise better use the t.a. methods an go on with the traditional analysis. With “impossible” I mean not available using traditional programming techniques. All t.a. is computer-based nowadays, so code is the key to performance. But traditional code cannot perform certain tasks in a manageable reasonable way, like forecasting next bars as the weather channel forecasts the temperatures for the next days. The model, neural networks based, can. Now, consider that saying “tomorrow low will be at XXXX.XX” involves a certain responsibility, bearable, in my case, by the long term performance of the model.

I’ve developed various indicators, during the never-ending development of r.Virgeel, and many have disappeared, leaving an affordable set of unique information. To best fit into everyone’s set of weapons, you have t.a. mimicking indicators, as rV.Target or rV.Stop, and some “impossible” indicators, as rV.Future Bars or rV.ExpectedTurn (which evaluates how many bars to the next turn) or rV.ColorBars (which evaluates at which stage inside the ideal position is the market and shows it as an easy to read colour code).

At a certain point, I started to develop the rV.Position indicators: they are many, all derived by the same learning process that reads the S&P 500 index flow into positions, long and short, picking always the best market position. Now, you may say, this IS a trading system and yes, in some way it is. In the middle, there is the behaviour of the model, that sees and detects a huge amount of patterns and correlates dozens of different inputs. Experience has taught to my faithful subscribers and me that r.Virgeel is very responsive, sometimes too much (it is still young, you know), rarely it gets blind for one bar (this behaviour has been drastically reduced by latest improvements), and it is correct most of the time.  I do not consider rV.Position indicators as a trading system, so I do not follow blindly its entry/exit signals; instead, I search for correlations between all the indicators to confirm any trading activity. Of great importance is the Weekly analysis, that has demonstrated to be well integrated with the Daily analysis.

Since few months, I have introduced an automatic summary: r.Virgeel writes a brief summary evaluation on the daily report and this is intriguing: it is a small text and it is working well, opening the road to new possibilities in the model output presentation.

more on the indicators…

 

Posted by Luca in free, generics, indicators, r.Virgeel, 0 comments

Gamification

If you think that the trader’s activity is similar to a game, I would like to first say it’s not. For many reasons. What makes to someone the trading activity similar to a game is a misconception of the bet. The novice tends to see a buy of a stock share as a bet, and, well, it somehow is a bet if you know nothing of what you are doing. Because it’s not a game.

But staying with the game analogy, I would prefer, to much adrenaline-driven action games, the more time related Virtual Regatta Offshore, a provider of oceanic regattas simulators in real-time with real conditions, here in the current RORC 2019 where I participate as minushabens. In this case, it is a 16/17 days ride from the Canarias to St. George’s Island. We are about 4 days from the arrival and I’m placed quite well: I was lucky, indeed!

 

Let me explain: the player have to decide its route considering the present condition of the wind and the future evolution of the wind, based on some known performance of the boat we are racing with (known as the polars of the boat, simply the speed of the boat at different wind speed at all angles). So, the player relies on the weather forecasts to evaluate its alternatives. While in real-world regatta you may apply a wide sort of tactics against your opponents, here you just race against the wind. No need to know the real sailing (it helps), we race against a worldwide huge number of participants. Here, at the RORC 2019, we are 37.000 and counting.

Now, I can guarantee you that my choices are not bets. Sometimes, as it is now, the choice has been more favorable, others are not so exciting, but if you want to appear in the first third of the ranking you cannot trust the simple bet. You must change your mind: you are challenging a force of nature, much bigger than you and good forecasts for 5 or 8 days ahead may easily change in 2 or 3 days, not much certainty around. Is anything sounding familiar? Now, if you substitute the word wind with the word stock market (the S&P 500, in this case), is it clear the analogy of the behavior of the player of the regatta and the position trader on the index?

If you see the game as a be-there-at-that-time-to-be-elsewhere-at-another-time dynamic, it’s not difficult to place yourself in the first 700, possibly between 300 and 500, where I often find myself at the arrival. A bit of luck today is appreciated. Obviously, you bet, there is a number of route calculators available as apps and websites. Every service is based on one of the available forecasts, then provides different best paths, but the game platform has often slightly different conditions and there you are gaming. You must be well placed in the space and time of the game to fully take advantage of the suggestions from the routing software. Here, as well, a bit of luck is largely appreciated. To remain once more in the game analogy, you are requested to dominate space and time, always need to consider the two as a whole. This is a common analogy with adrenaline games.

End of August. r.Virgeel is already positive for two days and gives a projected rv.Target around +3%. Great time to jibe!

The target was then reached at around 3000 in 10 days.

 

PS. Update – The RORC 2019 finished with me at 787th / 39101

 

 

Posted by Luca in educational, free, generics, performance, psychology, selected primer, 0 comments

Long Term Checkout

In various previous posts, I’ve stated that the monthly forecast is to take into account as a sort of path tracer, an indication, a generic route for future market action. I tend to consider it in this way, having a much more precise weekly and daily forecasts.

Today, I decided to get back to the far away in the past previsions and checkout their validity: I continuously check the forecast, obviously not always correct, but usually, I tend to be a bit superficial with the monthly forecasts. So, let’s see how it performed.

The first chart was the forecast published on the 1st of December 2017: almost 24 months ago! You may note that the forecast for the present November 2019 (the 24th bar in the future) is in the range 3100/3300.

In the second chart, brewed seven months later on the 1st of July 2018, the monthly forecast for the current month of November 2019 (17 bars into the future) was in the range 3050/3150.

Now, I leave to you any consideration about the quality of the forecasts by r.Virgeel, I just want to say that this is what I mean when I say that artificial intelligence is different and that you may “know in advance”.

 

 

 

Posted by Luca in checkouts, free, generics

Stair Seats

Most of us have a general knowledge of what statistic does: it extracts from data some relevant information about the data itself. What a neural network does is to add a layer of correlation between the data and relate it to the desired output. You must instruct a neural network, before using it. You must associate one or more values to each of your info sets (records of a table in a database, usually).  This is a process of knowledge transfer. It works well with classifications to produce diagnosis systems.

When well taught, and it is a long and delicate task indeed, the neural network has the ability to recognize patterns in never seen before data and so output the less improbable evaluation from its data bank of knowledge.

What are patterns? A pattern is an event that repeats in different shapes, but always in the same manner, staging always similar processes. The concept of pattern was introduced by the architect Christopher Alexander in its A Pattern Language (Oxford University Press, 1977). It was aimed for architects, and you may consider the approach with this sample 125 STAIR SEATS.

Then the concept of pattern has rapidly spread into the world of software programming, producing the revolution of object-oriented languages (OOPL). Leveraging on the human relational attitudes, patterns rise in every context, not excluded trading and investing, as traders know well. If you use technical indicators, you know what I’m talking about: your eyes are trained to recognize patterns in the charts. That’s why they call it artificial intelligence.

 

Posted by Luca in free, generics, model insights

As you asked

I have received from a reader:

Am planning to take monthly subscription. Before subscribe please let me know below queries.

Which platform needed to do trading ?
What exactly I get forecasting daily?
Any additional analysis i need to know? Before take trade? Will i get entry and exit positions?
Will I get text messages  to mobile?
How much capital needed?

 

Here my reply:

Which platform needed to do trading ?
Whichever you want. Trading activity is totally up to you.
What exactly I get forecasting daily?
The daily forecast is based on the daily timeframe and I enclose a few samples from of the Alpha Chart for your evaluation. It is composed of many indicators that outline the expected behaviour of the market in the immediate future.
Any additional analysis I need to know? Before take trade?
Investing and trading is a high-risk activity: consider that statistics about the new traders entering the market says that they are destinated to go out of money in about 18 months at a rate of 80/85%. Every trader has its own attitude and this is first what I suggest to you: find the market and the time frame and capital that gives you confidence. Some technical analysis may help, but the simpler the better. I love Elliott’s Wave theory and I’m sure every trader has its own preferred tools.
Will I get entry and exit positions?
r.Virgeel (the brain of the a.i.) was not designed to be a trading system, but it gives signals and a global evaluation of the best-suggested position relative to the market. It produces a chart and a word report to support your vision of the market.
Will I get text messages to mobile?
No
How much capital needed?
It’s a hard question to reply: it depends on your expectations, but basically on how much money you are ready to lose, before getting into a panic. Loosing is an active component of the trading activity. You need to learn (if you do not already know) how to reduce losses and you need to learn (if you do not already know) to trust your tools to maximize your profits.
If you are starting right now, I would suggest you try with a very small account, not much more than your pocket money. In this way, you have a sort of hard stop loss if things go wrong. Consider that every trader has learned the lesson going broke at least once, me as well.
Hope it helps.
Posted by Luca in educational, free, generics, hints, 0 comments

Waves and Cycles

When you get the patterns into the wave observation, you will see the cycles. Cycles that expand and contract, that generates trends, cycles of any dimension. Cycles that change continuously. Unlike technical analysis that tries to avoid the so called”noise”, neural networks love noise, you feed them with noise, the rawest data as possible seems always better, and then you have to train them.

I know at least three methods to extract cycles from an historical sequence: the Fourier’s Transforms and the method of Armstrong. Well, in effect I know almost nothing about Fourier’s Transforms and not enough of the Armtrong method. But I know about another way: the neural networks. What is interesting is that all the three methods  are totally different, use different tools and apply different logics.

Training a neural network means trasferring knowledge to the data. You associate, tag, mark, you name it, a certain record in you database to a certain “meaning”. For example, to the days lacking to the next turn. The unique ability of the neural networks is to project values in the future, not in base to an abstract theory, but crunching the real numbers.

Artificial Intelligence can analyze cycles, you just have to pose the correct question, as to the Speaking Mirror: you need to extract meaning from the patterns. One of the r.Virgeel’sindicators, the rv.NC Next Cycle evaluates when and where the next cycle will take place: how many bars into the future and at which price level. It is not a triggering indicators, it is aimed to focus our attention to the incoming events. I consider the rv.NC an alert indicator.

 

 

 

Posted by Luca in free, generics, model insights

Waves

Today I would like to talk about waves. The markets express themselves through waves. But first, let’s look at waves. When on the shore, look at waves. look at them for a long time and pattern will arise behind your eyes. When I first attempted to put a neural network at work, the real first time, after having prepared the database and applied the simplest conditions possible,  I was expecting a big awful inevitable crash in the code, or an anyway “impossible” error to underline that I was trying to make something not available. Whooo. It passed and produced a meaningful output. In a fraction of time, all the theories I’ve read about random walks went in the bin. Trash. Market activity is actually pattern-based, and patterns arise from the wavy nature. At that time, I was working using the SPX as the input of the network and it took me many years to understand that everything you want a neural network gives you,  it must be on the output side. Self-referential networks may work for a while, but they are going to crash.

Waves generate because many forces are applied to the market. On the water surface, it is the wind that generates waves. In the market, the summing of all the operative setups generate waves. Waves that have intensity (volume) and volatility (price delta). Return to the shore: you will note that waves into the sea have moments of intense activity and other moments of almost flat water. This happens because waves have the characteristic of summing them up, either building giant waves or reciprocally annihilating.

I saw these images by Dave Sandford  and, whether I suppose that heavy editing may have been applied, I’m sure you will be pleased to watch:

https://mymodernmet.com/dave-sandford-liquid-mountains-of-lake-erie/

We learn a very important lesson from these pictures: the dynamic of summing and annihilating each other generates exceptional events, explosions, overcharging, unsustainable conditions that collapse in a fraction of time. If you now return to a long term chart of the SPX,

Semi-log SPX monthly chart

I’m sure you are looking at it with a different eye. You know that enlarging the chart up to a 1 minute realtime, you have the same fractal behaviour. Waves build them up in any time frame.

Now, I would like your to return to “patterns will arise behind your eyes” and consider that, with a long experience, you may easily detect patterns in events. Simpler or more complex, patterns represent a probable outcome of an event, they fuel our ability to “foreview”. Patterns are actually the concept behind our self-defense attitude, they represent the conditions of a series of different components and their contribution to reaching a certain result.

Patterns inside a neural network are subject to the correlation between the inputs, as set up in the code. The network cannot guess something that it is not in the realm of what it already knows. No intuition. Correlation, instead. Correlation is the equivalent of the summation/annihilation process in water waves. In a neural network-based environment, the recipe of the elements that shape it is absolutely fundamental.

Can you correlate three inputs? Can you correlate twelve? many dozens? We do not have even the charting possibility of over imposing many dozens of prices and detect the available patterns. Here comes useful the neural approach. Consider that when analyzing the SPX, r.Virgeel does not “see” the SPX, it has no input from the index. What does r.Virgeel sees, instead? It sees the fluctuations of a selection of markets and econometric data from more than 200. The brain of r.Virgeel works at full steam for daily time frame with a distinguished size of 12 millions of neurons, and each one is a correlation. We are in a territory where human brain is by far over and artificial intelligence is able to produce meaning from what we humans perceive as chaos.

‘Cycles rise naturally into a system into which energy is added or subtract’

The website offers access to the numbers crunched by the neural networks: targets, stops, etc. Even if signals are provided, I recommend you to consider r.Virgeel is NOT a trading system, but a set of weapons you may add to your arsenal.

 

Posted by Luca in free, generics, model insights

Note to new subscribers

Since months, and it’s well documented in the free blog, the daily forecast is NOT SENT BY EMAIL, but accessible via the Alpha Chart page on this website. In this way, the forecast is much more efficient and flexible to be updated if necessary (sometimes it is).

Weekly and monthly forecast and analysis are sent by email as usual.

Thank you for your attention.

 

Posted by Luca in free, generics, subscription

Latest improvements

Latest months have been plenty of improvements in the structure and behavior of r.Virgeel. It now outputs a standardized 3d matrix of the indicators, that is easy to chart and interpret. A new interpretation and writing module is now active and r.Virgeel is able to write comments on its own. Two new indicators have been introduced: rv.Swing and rv.Rank. The Alpha chart page (premium users only), reflects all these improvements and it’s now easier than ever to read, now that r.Virgeel has started to write.

Latest months evidence is confirming that r.Virgeel is fine-tuned with the S&P 500 index and very responsive to market turns. It anticipates the turning point with simple signals and progressive degradation of the indicators, plus a warning system. A simple interpretation let’s you discern between corrections and major turns, to get maxim profit from the running position. r.Virgeel follows the market either long or short and with the aid of the FastTrack indicator, it can be useful even to intraday traders, at least for figuring out how the market is positioned. By personal experience, given an affordable background description and diving in the intraday arena, with a couple of averages and oscillators, it’s not difficul to follow the waves profitably, even down to the 2 minutes charts.

 

Posted by Luca in checkouts, free, generics, r.Virgeel

The new AlphaChart

Since a few weeks, subscribers have a new tool,  the AlphaChart page.

This page on the website has substituted the daily email and post, it has a larger chart, almost all model’s outputs are represented and it integrates the weekly and the monthly forecasts on the same chart. Most recent bars are enlarged in the bottom right corner, with the projected D-FT levels for the incoming bar. It has all relevant numeric data reported on it. The chart is clean and easy to be read, it has room for improvements and additions, easy to be accessed by your smartphone, tablet or pc.

The AlphaChart is updated every 15 minutes during trading days, to let users have visual feedback in (almost) realtime.

The first chart of the final version of the AlphaChart, dated 8th of February.

By the way, this chart indicates an rv.Target at 2805, exactly where we are almost one month later. Targets are dynamic, new targets have been opened during the past month.

The AlphaChart is still under development: it has reached a first stable step and I will refine and complete it. Also, the chart page is growing with additional analysis and the new real-time updates, that, I have to say, is a bit tricky: it is in alpha testing, at the moment, meaning that it may become a stable feature or die soon for lack of interest. But it may be important, during reversal days, to track the market during the close phase, to get alerts in advance.

 

 

Posted by Luca in free, generics, model insights, r.Virgeel

January checkout

During the whole month of January I have strictly watched out the D-FT behavior. All the obstacles have been  easily bypassed by the comparison of the other indicators. r.Virgeel is working well and I’m preparing a new enhanced chart. It will be ready in a few days, if I can solve some stupid (?) problem of auto-execution.

The long term issue of the easy flipping of the daily forecast (linked to the evidence of continuous bifurcations in the data structure) seems now reduced, usually no more than one bar and when the market goes overscale. Using the variety of indicators provided by r.Virgeel, it’s easy to stay on the correct side of the market.  Other than the medium-long term investing, I’m now testing the fast realtime trade. It’s not the first time, but the D-FT has introduced a new fashion in the intraday trading I’m sensible to. The two D-FT levels are very effective in helping to determinate the realtime dynamic as market moves. I’m testing the platform and setting up the program, it’s a game that I’ve pushed out from already.

Most of the indicators have been revised, with minor modifications, and the training has been revised completely for all three time frames (daily, weekly and monthly). In my personal opinion, r.Virgeel is in its optimal shape, for the work I can do and for the quality of the output.

I’m also re-approaching the nebulous  and elusive theme of cyclical analysis reading about Hurst cycles. No big enlightment, yet. Some improvement, maybe. The thing is there, I know, but still no shape.  Let me be clear: I would be very happy to have a totally different non-neural system that confirms r.Virgeel’s market readings,  not that I do not trust r.Virgeel, but a confirmation is better, isn’t it?

 

 

 

Posted by Luca in checkouts, free, generics

Forecast/ability 2

In the previous post “Forecast/ability” I did refer to the daily a.i. forecasts and I showed the results of a long and extensive research on the quality of the response of the model.

But when we come to the weekly and to the monthly forecast, things change radically and for the best. Undoubtedly, weekly and monthly bars undergo a reduced “noise” and express better the global consent of the partecipants to the market activity. Market is fractal in nature and I have not an explanation for why it behaves differently from daily to weekly and monthly time frames. Maybe because it reflects the attitudes of different categories of actors (investors have a totally different approach to the market than daytraders or position traders). Anyway this is what comes out years of observations of the forecasts produced by my model.

Just as an example, this monthly forecast chart has been produced exactly one year ago, on 5th of December of 2017 and shows how r.Virgeel forecasted correctly the October 2018 correction, ten months in advance. Astonishing, uh? Consider that the monthly model is a long term database of financial and econometric data, so the detected patterns are not only related to the market activity, but also to the underlying economic activity.

(The right part of the chart has been cutted, for respect to paying subscribers, as it refers to current market expectations and it is still valid).

 

 

Here another example, from the weekly model, published to subscribers on the 3rd of March 2018: the deep and scary correction was shaking the markets and r.Virgeel correctly forecasted that in 4 to 5 weeks the S&P 500 should reverse (not reaching the previous low) and go for new all times highs, as it did.

 

Quite obviously, these forecast on the long term side are not much interesting for very short term traders, but they may be invaluable for position traders and investors, that have a global vision of the market totally depurated from the biased news and the so-called experts opinions. hese are not opinions of any kind, they are the result of pure brute force number crunching

 

The psychological advantage of these knowledge is actually the first and best result: less stress, better decisions, more returns on your investments!

 

 

 

Posted by Luca in a.i., accuracy samples, free, generics, model insights, r.Virgeel

As you asked: Intraday

“I wanted to ask you if you ever thinking about making an intraday trading system.” (W.M.)

 

In the past, I already tried to build a real time version of the model, but it has some limitations: it’s hard to have quality data for a large set of instruments without “holes” and back in time enough to cover a long history. The access to the actual real time market data is compulsory. It’s a huge quantity of data.
It would require, to be done correctly, a very consistent investment in hardware, data feed, external coders, etc.: such a service should be “always on” and multi time frame; all considering it’s not in my possibilities.
In some way, even if I try to approach the analysis as abstract as possible, how spxbot is shaped reflects my attitude to the market as a good long term investor, a mediocre swing trader and a bad, no: awful,  short term trader.
Anyway, if you like to follow my advice, try to use r.Virgeel’s suggestions to shape the frame, the long term action of the maket below your intraday trading. I’ve done it for about six months, last year, with nice success, using a CFD account and trading the 15m to 1h charts with a momentum indicator. Using the r.Virgeel’s outlook, I traded all the waves in the direction of the underlying trend and never the opposite.The FastTrack indicator was not available yet, it has just few weeks. It is not designed to work intraday, well, it is not designed at all. It actually is the real first r.Virgeel’s contribution. FT seems to work well as a trend follower on a short daily basis. It tends to stay on the trend, bat can reverse in two or three bars, just following mr.Market digestion process. So, the FT indicator can show quite reactively how the tide is flowing and you can program your trades consequently.
I’ll give it a try.
Posted by Luca in fasttrack, free, generics

Bifurcation at last!

If you’ve read here and there around the blog, you know I sometimes used the word “bifurcation” to indicate double exit situations, but I’ve never been able to show them, before.

Now I’m building a new tool and the results are plenty of surprises. One is the following chart:

Next day bar is forecasted quite correctly, but the second day ahead shows an evident divergence.

Its another confirmation that bifurcations exist and are part of the data, are encapsulated into the model matrix.

 

 

 

Posted by Luca in free, generics, model insights, r.Virgeel

Serendipity at work

r.Virgeel’s model is undergoing deep modifications, sparkled by the development of the new weekly model, that has made evident some before obscure aspects. Where there was a wood, there is now a vast pratery. I’m translating the modifications into the “traditional” daily model and, it’s early to say, it seems getting sharper. The experiments must always be reversed, so it is a slow testing, but with exciting results.

Things are getting simpler and faster. It’s a good point. Sharpness seems improving. Another good point. Synchrony between daily and weekly models are at highest levels ever seen. And this is very intersting.

If you have read around the site, you already know that the three models (daily, weekly and monthly) are maintained and calculated separately, without contacts of any sort. Totally indipendents. The fact that they go in synchro is poorly probable, evidently. I take this a good sign that we I’m moving in the right direction.

Great. Nice moment, nice words, but where is the meat? Where are we in this big mess that is the S&P 500?

Well let me reply hiding the r.Virgeel answer to the question behind the beloved Elliott’s Soup, or Elliott’s Wave Theory,  that is pointing at the development of a fifth wave, on the following chart (by AdvGet). The total branch is well formed, the dynamic seems academic. We have just broke the previous (3) high, and we have a long accumulative phase behind. Rising highs and lows. All this preludes a strong move toward the top.  The chart shows two targets, at 3000 and 3300. The first is very near and it will be a mediatic shock when reached. What? The Stock Market Going To The Stars!

To fully develop, the fifth must take in the newbies. They are the fresh meat that fuels the money draining that happens when large bull movements happen. Opimism will spread, soon, around the stock market.

Beware the day the very first title of the tv is “The Stock Markets Booms!”. That will be the day to get out.

 

Chart by AdvancedGet

 

 

 

 

 

Posted by Luca in elliott's soup, free, generics, r.Virgeel

The Value of Opinions

The markets are the places where opinions are transformed in money. Opinions are represented by numbers. In we consider the S&P 500, it’s numbers represent the greed and fear oscillation, under a global scale, as it is the largest stock index traded. The market is an ever-changing-chaotic-bipolar environment, made up by thousands of individuals, everyone with a different view in mind.

The markets sort out of noise. When you look at a chart of a financial instrument, you see a noise reduction artifact, that makes much more sense to the eye, but is actually a convention for segmenting a free flux into manageable items. The fundamental noise gives shape to the chart. The tenths of thousands of actors that interact with the S&P 500 are the propelling noise that fuels the market.
Before the electronic era, the price was unique for the day, being the equiibrium value for all partecipants. Today, the price is the close of the time frame and that’s not a small difference.

Using technical analysis (ta) tools, I’ve always seen many attempts (indicators) to “clean” the data, to reduce or  to wipe out noise.A clear overfitting attitude. Splash ahead. When you take a position, it is under some expectations and sentiments are involved. Sentiments conflict with opinions. They struggle by nature.

Using neural networks (ai), I’ve discovered a tool that loves noise and is able to manage noisy correlations with a high degree of abstraction, or intuition, as you may call it.

While opinions still run wild in the territory of ta, they drastically reduce if you use have a robo-advisory ai that crunches numbers in the background.  And the robo-advisory is where the knowledge is transferred, where a learning process is applied to give to the ai the experience it needs.

In r.Virgeels’ case, the training is by necessity influenced by my attitude towards the market, I’m aware. I revised the training so many times, that I would say it is scientifically correct, but inside I know that another person should do some different evaluations and should correct some items.  Consider that training is 100% connected to output quality. If you set up a fantastic neural model and feed it with rubbish, you just  get rubbish out, no way.

The neural networks need to have all their data and training correct and well fitted, then the magic may happen. And then, you no more need opinions, just a few about the framework, about the global picture, for being in sinchro. r.Virgeel knows the market better than me and you and probably any human on the planet, for the simple reasons that it can correlate dozens and dozens of inputs, and we cannot.

 

 

 

 

 

Posted by Luca in free, generics, r.Virgeel

Managing bifurcations

You probably have noted an evident discrepancy in the public weekly and monthly range chart, published daily on the site home page: this is mainly due to the fact that in the latest couple of weeks the S&P 500 has gone through a large bifurcation, well managed by r.Virgeel in the daily and weekly time frames. Obviously, the monthly time frame is lagging, due to its own nature, and still reflects r.Virgeel forecast before the bifurcation event.

The bifurcation event happens when historical reactions to stated conditions were multiple and not univocal. Dealing with a long historical record, this kind of event are rather frequent and the are usually a nightmare for technicians. It is a typical behaviour of large chaotic systems.

This is a good example of the ability of the model to manage the ever changing nature of the market, as I say it is adaptive and responsive.

r. Virgeel has managed the short term correction, forecasted well in advance, with simplicity and is now back on the correct side of the market.

It’s artificial intelligence, it’s different.

 

 

 

Posted by Luca in free, generics, r.Virgeel

New feature: a short speech

I’ve done a step further – a short step, indeed – in the construction of a report from the data output of r.Virgeel. It speaks numbers, but we better see some added word, I suppose. So I’ve added a new section to the daily report (only for subscribers, so), titled “r.Virgeel condensed”: it summarizes the relevant data into sentences. At the moment, just the principal indicators are condensed, but the aim is to include some other interesting data.

Here, a test sample of the new section, (with errors!)

 

The new feature is just out of the lab and it’s plenty of subtle logical traps, so be patient for possible malfunctions. By now, just three lines. Hope it helps.

 

 

 

 

Posted by Luca in free, generics, r.Virgeel

IMHO

In latest weeks, I did some homekeeping to the website, reorganizing the contents of the blog, improving graphics and revising all pages. A brand new intoductory page is online, that explains the genesis and the characteristics of r.Virgeel.

I noted, re-reading many of the texts, that I often linger to show where r.Virgeel has problems or how it happens that it behave falsely and so on. It’s my attitude, I have to map everything and everything must be all right to pass to the next step. Now, if you ask me my real honest candid plain opinion about r.Virgeel, well, I just can say it is fantastic! It makes the technical analysis look pre-deluge. It does not analyze one single line of data, it correlates dozenz and dozens. Yes, you have to trust it, and this will require a bit of time.

In latest weeks, while the index was going through a complex correction, r.Virgeel has kept us on the correct side with a nice timing – and I mean that it makes us aware of the events coming, days or even weeks in advance. It has passed through some bifurcations, usually with just one bar of uncertainty. It is performing very well and its experience (the database) is larger and cleaner everyday.

I say it is fantastic, not only because I wrote each line of its code, but for three main reasons: r.Virgeel makes a work that no human can imagine to accomplish: correlate dozens and dozens of historical prices and recognize patterns. Then, r.Virgeel does it work so well now that you can relax and enjoy your new spare time. Well, yes, if you are a medium to long term investor. And if you are a short term swing trader, you can profit from the forecasts as well, to build up your strategies. I personally tested succesfully the use of r.Virgeel predictions for intraday trading on CFD. Finally, r.Virgeel “sees” the SPX – and it can see it in advance – as no other robo or analyst does, and  it’s actively developed. It’s a growing artificial intelligence.

Of course, as I often repeat, it’s different, you must be open to a deep change in your trader’s mind: less stress, less compulsive orders, just wait for all the stars to position correctly and act in the correct direction.

 

 

 

Posted by Luca in free, generics

Are you kidding?

Going throug the whole materials that I have accumutated during spxbot development, I crossed this post from Dec. 19th 2014, available here.

This was the very day I opened my eyes, this chart demontrated that, even if it was in it’s very first steps, r.Virgeel could see “things that we humans…”

The chart is here. It is very rudimental, but the message is clear. We came from a very negative week and the forecast – as usual brewed in the weekend before the Monday opening – showed a close totally recovering the loss.

I thought it was kidding and that my many months of work were rubbish. Then came the Friday checkout and… Bingo! The dart was in the centre. I really couldn’t believe!

(the small red dot is the close of the week, the bull’s eye is the forecasted value)

Two things were coming to the surface: 1. there is a structure in the market and 2. r.Virgeel can see it better than us.

More than three years since then, r.Virgeel walks on its legs as a nerdy teen now, long time has passed.

 

 

Posted by Luca in free, generics, memorabilia, model insights