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 MarketTrak Question/Comment Message


Posted By: Tom D   Date: Tue Nov 18, 2008

Title: Change

Message:
  I'm not criticizing your intellectual or mathematical integrity, or your competence in any way. That is all quite first class in every way. It is deeply appreciated for those very reasons.
 
  What I have questioned and am now questioning in my own mind is whether neural networks really add value, in the sense of dollars in hand, over all types of market cycle environments? I think that individual human beings with great skill and insight do much better. That is meant not as an "anti-machine" comment either, but just as an observation over many years of market experience. Perhaps networks can serve as a baseline or "benchmark", just as moving average systems can do. In that way they could be a part of a portfolio management system, but not the whole thing.

Response:
  I think you should use the results of this model in a way that suits your needs. The model will make bad predictions and this fact needs to be factored into the decision process that you use to trade. Certainly, confirming the signals with human judgment and more traditional models would be a wise thing to do.

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