Stock Prophet is a general purpose trading system development tool employing BrainMaker neural network technology to automatically combine multiple indicators into a single clear buy/sell signal. It can be applied to stocks, mutual funds, futures and other financial instruments. Stock Prophet is a product of Future Wave Software.
Stock Prophet aids traders by consolidating multiple intermarket factors into a clear trading signal. Many market analysts have a repertoire of favorite indicators, but decision making is difficult due to conflicting indications of market direction. Stock Prophet employs neural network technology to automatically combine multiple indicators into a single clear buy/sell signal. It does this by providing straightforward development of trading systems based on the artificial intelligence neural network technique as well as conventional technical analysis. The result is "institutional class" technical/quantitative analysis capability for the astute investor. Highlights of Stock Prophet are:
As nearly all neural network afficianados agree, the most difficult step in operating a neural network is gathering and preprocessing voluminous, high-quality data. Neural networks, as powerful as they are, depend on applicable data in sufficient amounts, and in an appropriate format, to work their magic.
Stock Prophet automates much of the preprocessing needed to format data for BrainMaker while allowing the user to incorporate a wide array of well-known technical indicators.
In a 1995 issue of Technical Analysis of Stocks and Commodities, Technical Editor John Sweeney noted that neural net integration is a major feature of Stock Prophet, saying that the user can "skip developing complex rules (and redeveloping them as their effectiveness fades) . . . just define the price series and indicators you want to use, and the neural network does the rest."
Moreover, as Sweeney goes on to say, "a major benefit of the neural network is that you don't have to define specific trading rules. Instead, the neural network derives the rules during training from the data. When BrainMaker sends an indicator back from its processing, the only rule required is above zero it's a buy, and below zero it's a sell."
Stock Prophet offers a full complement of technical indicators (on-balance volume, open interest, MACD, split volume, acceleration, etc) or the user can implement his or her own indicators by creating them in another program and importing them via ASCII files. Additionally, Stock Prophet's data manipulation features include detrending, summation, limiting values, scaling, Fourier transformations, and biasing. Several of these indicators can be applied to previously generated indicators, thus increasing data preprocessing options. Many of these options (particularly the neural net data preprocessing features) can be automated through Stock Prophet's macro capability.
The value of a Stock Prophet/BrainMaker combination is summed up concisely by Stocks and Commodities' Sweeney: Stock Prophet's unique feature in developing trading signals is that it's neural net indicator is a prediction of future trend, published in advance of the trade date . . . if you get good signals 10 days in advance of the trade, you're going to be one delighted camper! If you could imagine that, try this program out.