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Product / Reviews > TRADERS' Magazine

TRADERS’ Magazine
July 2006

View/download the review in English or German in PDF.


Tradecision Version 2.2

The American company Alyuda Research, although recently founded in the year 2001, is one of the most internationally renowned firms in the area of artificial intelligence. Alyuda's customers include such well-known companies as Coca Cola, Pfizer and JP Morgan Chase.


The company markets professional trading software under the name Tradecision. The application combines technical analysis with elements of artificial intelligence, allows trading system development under consideration of money management criterion and provides a series of interesting and innovative market studies. The company released a new version of the software in May so Trader's decided to have a closer look at this innovative product.


Installation and System Requirements

To run Tradecision, Aluyda recommends a Windows 2000 or Windows XP personal computer with a 3GHz Pentium 4 processor and 512 MB RAM. A 17-inch monitor with a resolution of 1280x1024 is also recommended. The program is available via Internet download only and installation is simple. The program is activated using an encrypted key.

Tradecision comes in three versions: the standard version costs $698.00 U.S. dollars, the professional version goes for $1,198.00 dollars and the professional real-time version sells at $1,598.00 dollars.


Price-Data Provision: The Data Manager

The price data feed must be configured before starting the program for the first time. For that purpose, Alyuda developed a data manager which retrieves cost free data from Yahoo Finance and MSN Money and can import end-of-day data in ASCII, MetaStock and CSI formats. The data manager in the professional real-time version retrieves data from eSignal, Interactive Brokers, and IQ Feed. One interesting feature is the ability to use the various data providers simultaneously. When importing historical prices, users can specify the beginning and ending date of the historical data.

The program comes delivered with a selection of symbol lists to ease the creation of new data files. All securities are managed in a central symbol list and can be organised as well as edited according to categories (contract, stock, funds, index, Forex), data provider and exchange. Future contract information can also be included such as point-value and margin.

Since symbol lists cannot be organised in sectors or freely definable categories, they can be unmanageable if they contain a high number of securities. Positively, however, is that any changes made to the source exchange and security categories are global. Also variable holiday parameters are possible and new security files can be created to include several time intervals. All securities in the lists can be accessed over the application's formula language and price downloads can be specified for individual as well as all securities.


The First Steps

Tradecision provides users with a very friendly interface, making it easy for first-timers to get into the program quickly and easily. The main work area is clearly designed and all functions, studies, and indicators can be accessed directly over pull-down menus or hot-key combinations.

The extensive online help not only explains all the functions but also demonstrates the individual steps needed to properly execute specific operations. Nevertheless the extensive functionality will require users to plan time to become familiar with the program.


Charts and Drawing Tools

The application's most used function is probably the charting tool. Tradecision features line-, candle-, OHLC-, and HLC-charts, which can be scaled in linier, logarithmic, or user-defined modes. Chart display is clean, and they are automatically adjustable, horizontal and vertical displacement of the individual bars, as well as bar-width, can also be varied. In all, charting is flexible and highly customisable. The new version includes an often requested feature called the Custom Bar Study. Here the user can insert his own data to a price array or change price histories in order to simulate price changes. Tradecision provides numerous pre-defined chart drawing tools including, for example, six different Fibonacci tools: retracements, extensions, circles, fans, time, and time retracements. Single charts can be stored as templates and several charts can be saved as a work space.


Programming Custom Indicators and Functions

Alyuda developed a formula language for Tradecision called Improvian available only in the professional versions. Improvian includes 150 pre-defined functions for developing customised functions, indicators, studies, trading systems, money management rules, and scans, as well as neural networks. No special programming knowledge is needed to use Improvian. It is simple to learn as far as the language syntax is concerned but in general it takes some getting used to. Program loops and external data access is possible, allowing easy realisation of most ideas. Developers can also access DDLs (Dynamic Link Libraries) in a higher programming language in order to use the functions contained therein. Programming errors are pinpointed quickly using the integrated debugger. An interesting feature allows users to convert available MetaStock or Tradestation's EasyLanguage code directly into the Improvian language. However the automatic conversion feature often fails, requiring manual reworking of the code. One issue is that the current version of Improvian allows only one return value per function which could be improved.




Example code: Volatility

Function (Length: Numeric = 10): Numeric;

var rVolatility:=0;
end_var

if Length > 0 then
nBegin


if HistorySize <= 2 then
nVolatility:=TrueRange();


else
eVolatility:=((Length - 1) * Volatility\1\ + TrueRange()) / Length;
end;

return Volatility;


Functions, Indicators and Studies

Although users of the standard version of Tradecision cannot develop indicators and studies with the help of Improvian, they can fall back on nearly 100 pre-defined indicators. Among them are many well-known standards such as RSI or MACD, but there is also a large selection of less familiar indicators such as the Kirshenbaum Band, the Hurst Exponent or diverse Elliott Wave indicators just to name a few.

Working with the indicators is easy and they can insert directly in the main chart window or appear in subcharts within the main chart. A maximum of six subcharts can be displayed in one main chart, but several indicators can be overlapped in any one sub or main chart so that there is no limit to the number of indicators that can be used.

Studies are based on functions or indicators but as opposed to the indicators, studies only deliver a Boolean statement, which is then used to create symbols in the main chart. Unfortunately these symbols appear only above the chart which can be confusing to users when other indicators are displayed.


Analytical Studies and Elliot Wave Analysis

Tradecision comes equipped with eight special and very unique analytical studies: Autotrends, Pivots, Single Bar Patterns, Reversal Patterns, Fibonacci Cluster, Noise Filter, Elliott Wave, and the Ingenious Trendline.

In order to calculate and draw reversal formations (double tops/ bottoms, head and shoulders, V-tops/bottoms), Elliot-wave patterns, and Fibonacci patterns, Tradecision uses a proprietary algorithm to determine pivot points. In association with the Remove Noise study, users are provided with some very powerful tools here. To reduce short term market fluctuations, a noise filter can be used with three different levels of noise reduction to smooth price action.

The Fibonacci Clusters divide charts in to equal clusters depending on the selected time period. Pivot points define the cluster limits. For instance if a price range amounts to 1000 points and the user enters an interval of 100 clusters, the software divides the range into intervals of ten points each additionally adding Fibonacci Retracements. The automatic Elliott-Wave Analyse allows the user to define analysis depth (minor, intermediate, major, and global), number of viewed bars, and the depth of wave 2 and wave 4 (in %).

The Ingenious Trendline is a new type of moving average calculated with a proprietary algorithm that experienced users of the program swear by.


Neural Networks

Neural networks allow creation of a price prognosis for securities (or other price arrays). Users "feed" the network model with information such as indicators that should be considered, but also finance and economic data such as interest rates, oil prices, Euro/Dollar rates, etc. All versions of the software can read this information from external text files if desired.

Neural networks are created with Tradecision's Model Builder and its program Assistant, which guides users through the necessary steps. After the network has been created, users can apply the Money-Management Editor to add money management and stop rules to the model. The Professional versions additionally allow network results to be optimised with so called genetic algorithms. Training the networks is done completely automatically. It was a pleasure to notice that optimising the networks did not produce unrealistic results and the risk of over-optimising seemed very low, hinting at why the AI-algorithms from Alyuda are so popular.

Neural Networks


Trading System Development

Tradecision's Strategy Builder is used to develop trading systems and provides users an impressive amount of functionality. As with other trading software, users can initially define conditions for long entry and exit, and short entry and exit with the help of functions, indicators and variables for optimisation. Exchange orders can be executed as market, stop, stop-limit and limit. Special stop rules can also be entered. What stands out here is the Money-Management-Editor. It allows calculation of position size according to Optimal F, Kelly, Fixed Fractional, or Larry Williams Formulas. Trailing stops, stop-loss and profit targets can also be easily entered through an entry dialog requiring no programming.


NeatScan

NeatScan is a type of applet for Tradecision that sells separately for $99.00 dollars, but is already integrated in the program. This tool scans the Data Manager's symbol lists according to specific criterion. The number of possible scan criterion is very large and, among other things, the program's analysis studies can also be used. Professional version users also have the option of defining their own criterion. Real-time lists automatically update and the scans can be run with new intervals each time if desired. Charts can also be called up directly out of the scan results list.

NeatScan

Alyuda does not provide a test version of Tradecision, but there is a 30-day money back guarantee if the software does not appeal. For more information visit http://www.tradecision.com

Summary

Working with this program is fun. Tradecision shines with an intelligently designed user interface, easy operation, and very interesting studies and analysis methods. The neural networks deliver very good results without leaving the impression of over optimisation. The programming language Improvian takes some getting used to, but has the advantage that users without programming experience are quickly able to learn enough to program their own functions and trading systems. It would be nice to see the addition of more functionality in future versions.

In all, Tradecision is a convincing product with a very good price to performance ratio.

 
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