Historical Profitability Testing
Stock Prophet enables profitability testing so the efficacy of indicators for market timing can be tested. The testing allows for penetration of moving averages by price, penetration of a moving average by an indicator, and indicator penetration of a user specified level. The level of trading rule definition distinguishes between long and short trading rules. Profitability summaries include simultaneous evaluation of separate long only, short only and combined long and short trading strategies. This capability allows efficient selection of trading strategies having good prospects for future success. Profitability testing of the Stock Prophet neural network buy/sell signal is very simple. If above zero buy, if below zero sell - but keep in mind that the signal comes early and actual execution of the trade must be delayed relative to the actual zero crossing. This is great for trading but requires a very special ability, provided by Stock Prophet, to delay trades during profitability testing and illustrates the unique quality of Stock Prophet.