Secret 10SECRET PREDICTION METHODS
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In Secret #6. we discussed the almost impossible task of predicting
futures and stock prices. However, out there are some
methods that will improve your ability to predict the future; in
other words, crystal balls that work sometimes. We live in a problematic
world where there are no sure things, but there are ways
to bend the odds in your favor where you are right about the future
more often than you are wrong.
We are in the midst of a technological revolution. In the
next two decades computers will probably become more intelligent
than humans. This is due to the fact that microprocessors’
speed doubles every eighteen months and has for the past thirty
years. The explosion in technological development will accelerate
as the computer becomes more intelligent.
Forecasting techniques that have developed due to this revolution
include neural nets and genetic algorithms. These techniques
are only possible with high-powered computers, which
are now even in the home.
Neural nets use a methodology similar to how our brains
work and identify patterns in data that cannot be identified by the
naked eye.
Genetic algorithms is an evolutionary process similar to
how we evolved from microorganisms over millions of years.
With super fast and powerful computers, the evolutionary
process can be replicated on the computer.
One company, Ward Systems, has trading systems software
that use neural nets and have developed a specific software that
may give you an edge. We also have experimented with neural
nets in predicting stock index moves and have formed systems
that predict market moves about 60% of the time. Nevertheless,
because even neural nets can only have a small porthole on the
future, this still tells us that the markets approach randomness.
Besides, these artificial intelligence tools, such as neural
nets, do require a lot of work and a lot of continued retraining to
implement.
Furthermore, even with these futuristic techniques for predicting
the markets, when too many people use these methods
and millions of dollars are poured into this process, the markets
will become even more efficient and the future less predictable.
You may be able to develop a system that finds a peep hole
on the future, but that could take a lot of work and continued retuning
of your system.
Here, again, the advantage of options trading comes
through; you don’t have to predict the future.
In Secret #6. we discussed the almost impossible task of predicting
futures and stock prices. However, out there are some
methods that will improve your ability to predict the future; in
other words, crystal balls that work sometimes. We live in a problematic
world where there are no sure things, but there are ways
to bend the odds in your favor where you are right about the future
more often than you are wrong.
We are in the midst of a technological revolution. In the
next two decades computers will probably become more intelligent
than humans. This is due to the fact that microprocessors’
speed doubles every eighteen months and has for the past thirty
years. The explosion in technological development will accelerate
as the computer becomes more intelligent.
Forecasting techniques that have developed due to this revolution
include neural nets and genetic algorithms. These techniques
are only possible with high-powered computers, which
are now even in the home.
Neural nets use a methodology similar to how our brains
work and identify patterns in data that cannot be identified by the
naked eye.
Genetic algorithms is an evolutionary process similar to
how we evolved from microorganisms over millions of years.
With super fast and powerful computers, the evolutionary
process can be replicated on the computer.
One company, Ward Systems, has trading systems software
that use neural nets and have developed a specific software that
may give you an edge. We also have experimented with neural
nets in predicting stock index moves and have formed systems
that predict market moves about 60% of the time. Nevertheless,
because even neural nets can only have a small porthole on the
future, this still tells us that the markets approach randomness.
Besides, these artificial intelligence tools, such as neural
nets, do require a lot of work and a lot of continued retraining to
implement.
Furthermore, even with these futuristic techniques for predicting
the markets, when too many people use these methods
and millions of dollars are poured into this process, the markets
will become even more efficient and the future less predictable.
You may be able to develop a system that finds a peep hole
on the future, but that could take a lot of work and continued retuning
of your system.
Here, again, the advantage of options trading comes
through; you don’t have to predict the future.