My guest today is Dr. Ted Warnock, he is a PHD in Aerospace Engineering, a literal rocket scientist. We’re talking about your testing of the TradeShark software. Can you talk about your background first?
Sure, I’ve been involved with advanced technology development programs for over 30 years now. Many of them dealing with adaptive algorithms of all kinds, in the aerospace world primarily but also in data exploitation and several years ago I actually pioneered the application of neural networks to predicting the orbital lifetimes of tethered satellites. That’s a mouthful but it was a challenging problem and we were able to get neural networks to do the job.
So Dr. Warnock, when you set out to test TradeShark software what did you want to accomplish?
Well I wanted to see the accuracy of the software. I wanted to see how well it could predict future price movement across the range of markets that are offered in the software.
How did you go about setting up the testing process?
Well, basically I selected 40 different markets from the software, those were quasi random, I had no pre knowledge of how they were going to perform in the software. Some of them were markets that were interesting to me personally and some of them I knew were interesting to the broader audience and others that I had no idea, they were just markets that I pulled out of the hat essentially and then I used data across an extended period, ran the software, generated the predicted neural index and looked at the performance of that across that time period to understand if the predicted neural index said a market was going to go up, did it happen.
And what were you results?
Extremely impressive. I saw essentially an 80 percent across the board average accuracy in all the markets that I looked at. It was amazingly consistent among different markets and different types of trading instruments.
Did it surprise you, those high success rates, surprise you?
Their very impressive, you know predicting anything in the stock markets is not exactly an easy endeavor and so, I don’t know that I was surprised given that I expected it to be a quality product, but I was definitely impressed at the performance of the software. It was very consistent, as someone who’s built neural networks and used neural networks I know that that is not an easy thing to pull off especially for a wide variety of elements that we’re trying to deal with here.
So, then, what do those results tell you about how TradeShark can help an individual trader make money.
Oh wow, if you’ve got a software tool in your hands that is 80 percent accurate in letting you know if the market is going to move up or move down, that’s kind of like foresight and that is something you can definitely leverage in your trading.
Alright, you mentioned 80 percent, have you seen anything that’s been higher in terms of accuracy in trading?
No, not at all. Not at all, never seen anything that’s 80 percent reliable like TradeShark.
I know there’s a lot of things going on underneath the hood of the software but, how is it helpful to a trader who may not understand all that’s going on but still wants to use it to trade?
Well the beauty is that the trader doesn’t have to know anything about neural networks. The trader simply has to know the market that he or she is interested in and be able to operate the software. The software gives very clear feedback everyday about what is expected to be happening in the next day or two actually.
So Dr. Warnock, I know neural networks can be very complex even for PHD’s but for as an individual trader, how clear is it about what the software is telling me to do?
Oh, the software has been developed to be very very user friendly. Basically everyday a trader would check the software and get an indication of up, down or N/A from the neural networks that are imbedded within TradeShark. In the case of N/A what the network is telling you is there is not enough inclusive evidence from all the intermarkets that are being considered to definitely predict future market movement.
And that can be just as valuable keeping me out of a bad trade in a sideways market that it could telling me to take a good trade.
Absolutely, staying out of a bad trade is hugely valuable to traders, as you know.
What were your results in terms of the accuracy in both up and down markets?
I saw very consistent performance across up markets and down markets. I actually examined the performance for up days and down days coming out of the software and what I saw was extremely similar results between the two. I was very impressed by this because unlike some products or some methodologies that are only very successful when we’re in an extended trend for example, TradeShark demonstrated itself to be very capable in up markets, down markets and also sideways markets. Sometimes the neural networks give you feedback and the result is N/A and what the network is trying to tell you is, there is not enough conclusive evidence from the intermarkets that are being considered to actually make a call as to market movement in the next couple of days and so that is where the trader can use that information and decide not to enter the market.
So you found a software that will cross all the markets and also whether it was up, down or sideways that it worked.
Dr. Warnock, thanks for being here.
We’ve been talking about the accuracy of TradeShark software with Dr. Ted Warnock.