Table of Contents

The table of contents for the manual is as follows:


1  INTRODUCTION to STOCK PROPHET . . . . . . . . . . . . . . . .   1-1
        - Convenient Charting of Financial Instruments.. . . . .   1-1
        - Moving Averages. . . . . . . . . . . . . . . . . . . .   1-1
        - Technical Indicators . . . . . . . . . . . . . . . . .   1-1
        - Mathematical Operations On Indicators. . . . . . . . .   1-2
        - Relative Strength and Spreads. . . . . . . . . . . . .   1-2
        - Historical Profitability Testing . . . . . . . . . . .   1-2
        - Neural Network Interface . . . . . . . . . . . . . . .   1-3
        - Data Base Maintenance. . . . . . . . . . . . . . . . .   1-4
        - Hard Copy Output . . . . . . . . . . . . . . . . . . .   1-4

2  SYSTEM REQUIREMENTS FOR STOCK PROPHET
        OPERATION. . . . . . . . . . . . . . . . . . . . . . . .   2-1

3  INSTALLATION and SETUP. . . . . . . . . . . . . . . . . . . .   3-1
        3.0A Addendum to Chapter 3.0 . . . . . . . . . . . . . .   3-7
        Installation of AEGIS Security Key . . . . . . . . . . .   3-7
        EMS Memory . . . . . . . . . . . . . . . . . . . . . . .   3-7
        Computer Configuration Switcher. . . . . . . . . . . . .   3-8

4  OVERALL OPERATION of STOCK PROPHET. . . . . . . . . . . . . .   4-1
        S - Select a Security and Plot It. . . . . . . . . . . .   4-3
        M - Moving averages. . . . . . . . . . . . . . . . . . .   4-5
        C - Compare Two Securities . . . . . . . . . . . . . . .   4-5
        I - Indicators . . . . . . . . . . . . . . . . . . . . .   4-5
        R - Profitability Calculation. . . . . . . . . . . . . .   4-6
        P - Pointer and Numerical Values . . . . . . . . . . . .   4-6
        B - BrainMaker Input . . . . . . . . . . . . . . . . . .   4-6
        A - ASCII Interface. . . . . . . . . . . . . . . . . . .   4-7
        X - Clear Screen . . . . . . . . . . . . . . . . . . . .   4-8
        W - Import Plot into Word Perfect  . . . . . . . . . . .   4-8
        H - Hard Copy. . . . . . . . . . . . . . . . . . . . . .   4-9
        Z - Configuration. . . . . . . . . . . . . . . . . . . .   4-9
        D - DOS Shell. . . . . . . . . . . . . . . . . . . . . .   4-9
        Q - Quit Running STOCK PROPHET . . . . . . . . . . . . .   4-9
        4.0A Addendum to Chapter 4.0 . . . . . . . . . . . . . .  4-11
        K - Change Computrac/MetaStock Data Directory. . . . . .  4-11
        Y - Automation MACRO . . . . . . . . . . . . . . . . . .  4-11
        Additional Information on Z - Configuration. . . . . . .  4-12

5  MOVING AVERAGES . . . . . . . . . . . . . . . . . . . . . . .   5-1
        Simple Moving Average. . . . . . . . . . . . . . . . . .   5-1
        Exponential Moving Average . . . . . . . . . . . . . . .   5-1
        Weighted Moving Average. . . . . . . . . . . . . . . . .   5-2
        Bands. . . . . . . . . . . . . . . . . . . . . . . . . .   5-2

6  SPREADS and RELATIVE STRENGTH . . . . . . . . . . . . . . . .   6-1
        S - The Standard Spread. . . . . . . . . . . . . . . . .   6-1
        F - The Percent Spread.. . . . . . . . . . . . . . . . .   6-2
        R - The Basic Relative Strength #1 Calculation.. . . . .   6-2
        P - Alternative Relative Strength #2 Calculation . . . .   6-3
        6.0A Addendum to Chapter 6 . . . . . . . . . . . . . . .   6-5
        C - Ratio of Securities (RATIO). . . . . . . . . . . . .   6-5
        D - Ratio of Security to Security Plus Reference
                (S/(S+R)). . . . . . . . . . . . . . . . . . . .   6-5

7  TECHNICAL INDICATORS. . . . . . . . . . . . . . . . . . . . .   7-1
        7.1  Accumulation Distribution Volume (ADV). . . . . . .   7-2
        7.2  BrainMaker Estimate (BM). . . . . . . . . . . . . .   7-2
        7.3  Breakout Index (BOI). . . . . . . . . . . . . . . .   7-3
        7.4  Chaikin Oscillator (CHAK) . . . . . . . . . . . . .   7-5
        7.5  Commodity Channel Index (CCI) . . . . . . . . . . .   7-5
        7.6  Directional Movement (+DI/-DI). . . . . . . . . . .   7-7
        7.7  Directional Movement (DX) . . . . . . . . . . . . .   7-8
        7.8  Directional Movement (ADX). . . . . . . . . . . . .   7-9
        7.9  Directional Movement (ADXR) . . . . . . . . . . . .   7-9
        7.10  Moving Average Convergence Divergence
                (MACD) . . . . . . . . . . . . . . . . . . . . .  7-10
        7.11  Moving Average Difference Oscillator
                (MAO). . . . . . . . . . . . . . . . . . . . . .  7-11
        7.12  Moving Average of Indicator (MAI). . . . . . . . .  7-12
        7.13  Moving Average of Stock (MAS). . . . . . . . . . .  7-12
        7.14  Negative Volume index (NVI). . . . . . . . . . . .  7-12
        7.15  On Balance Volume (OBV). . . . . . . . . . . . . .  7-13
        7.16  Open Interest (OPI). . . . . . . . . . . . . . . .  7-13
        7.17  Positive Volume Index (PVI). . . . . . . . . . . .  7-14
        7.18  Price Replaced by High/Low/Close
                Combination (HLC). . . . . . . . . . . . . . . .  7-14
        7.19  Price as Indicator (PI). . . . . . . . . . . . . .  7-15
        7.20  Price / Open Interest DeltHxTrend (PODT) . . . . .  7-15
        7.21  Price / Open Interest Statistic (POS). . . . . . .  7-16
        7.22  Price / Volume Delta Trend (PVDT). . . . . . . . .  7-18
        7.23  Price / Volume Statistic (PVS) . . . . . . . . . .  7-19
        7.24  Price Volume Trend (PVT) . . . . . . . . . . . . .  7-21
        7.25  Rate of Change (ROC) . . . . . . . . . . . . . . .  7-22
        7.26  Relative Strength Index (RSI). . . . . . . . . . .  7-22
        7.27  Stochastics (STO). . . . . . . . . . . . . . . . .  7-24
        7.28  Volatility - Price Daily Range (DR). . . . . . . .  7-25
        7.29  Volatility - Standard Deviation (SD) . . . . . . .  7-25
        7.30  Volume (VOL) . . . . . . . . . . . . . . . . . . .  7-26
        7.31  Williams Accumulation / Distribution #1. . . . . .  7-26
        7.32  Williams Accumulation / Distribution #2. . . . . .  7-27
        7.33  Williams %R. . . . . . . . . . . . . . . . . . . .  7-27
        7.34  Custom Indicators & ASCII Interface. . . . . . . .  7-28
        7.35  An Example of Operation - The McClellan
                Oscillator . . . . . . . . . . . . . . . . . . .  7-33
        7.0A Addendum for Chapter 7. . . . . . . . . . . . . . .  7-37
        7.36 Moving Average Convergence Divergence
                Oscillator (MACDO) . . . . . . . . . . . . . . .  7-37
        7.37 Acceleration - Rate of Change of the Rate of
                Change (ACC) . . . . . . . . . . . . . . . . . .  7-37
        7.38 Money Flow Index (MFI). . . . . . . . . . . . . . .  7-38

8  MATHEMATICAL OPERATIONS . . . . . . . . . . . . . . . . . . .   8-1
        A - Detrend by Least Squares . . . . . . . . . . . . . .   8-1
        B - Detrend by First Differences . . . . . . . . . . . .   8-1
        C - FFT of Indicator . . . . . . . . . . . . . . . . . .   8-1
        D - Limit and Set to Zero (LIM). . . . . . . . . . . . .   8-5
        E - Summation (SUM). . . . . . . . . . . . . . . . . . .   8-5
        F - Multiply by a Scale Factor . . . . . . . . . . . . .   8-6
        G - Add a Bias . . . . . . . . . . . . . . . . . . . . .   8-6

9  PROFITABILITY TESTING . . . . . . . . . . . . . . . . . . . .   9-1
        S - Trading Rule Menu. . . . . . . . . . . . . . . . . .   9-3
        B - Generate Trading Signals and Calculate
                Profitability. . . . . . . . . . . . . . . . . .   9-3
        G - Generate Trading Signals Only. . . . . . . . . . . .   9-3
        P - Calculate Profitability Only . . . . . . . . . . . .   9-4
        Q - Quit . . . . . . . . . . . . . . . . . . . . . . . .   9-5

10 NEURAL NETWORKS and the BRAINMAKER
        INTERFACE. . . . . . . . . . . . . . . . . . . . . . . .  10-1
        10.1 Basic Discussion. . . . . . . . . . . . . . . . . .  10-1
        10.2 Generating the BrainMaker Files . . . . . . . . . .  10-7
                G - Generate Market Trend Output
                        Neuron . . . . . . . . . . . . . . . . .  10-7
                I - Save Indicator For Input Neuron Data . . . .  10-8
                F - Set Up Fact Files For BrainMaker
                        Training . . . . . . . . . . . . . . . .  10-9
                T - Set Up Test While Training Files . . . . .   10-13
                R - Fact Files Used to Run a Trained
                        Network. . . . . . . . . . . . . . . .   10-14
                S - Summarize Indicators Available for BM
                        Files. . . . . . . . . . . . . . . . .   10-15
                P - Print Out Training File Summary. . . . . .   10-15
                A - Save BrainMaker Indicator Under a
                        New Name . . . . . . . . . . . . . . .   10-16

                C - Correlation of BrainMaker Price Trend
                        Prediction and Actual Price Trend. . .   10-16
                D - Operating BrainMaker . . . . . . . . . . .   10-17
        10.3 Testing Your Network with Walk Forward
                Profitability Testing. . . . . . . . . . . . .   10-17
                A Time Saving Tip. . . . . . . . . . . . . . .   10-20
        10A Addendum to Chapter 10 . . . . . . . . . . . . . .   10-23
                G - Additional Information on Market
                        Trend Neuron . . . . . . . . . . . . .   10-23
                E - Evaluate Correlation of Indicator and
                        Market Trend . . . . . . . . . . . . .   10-23
                Hints to Improve Generalization. . . . . . . .   10-26

11  STOCK PROPHET UTILITIES. . . . . . . . . . . . . . . . . . .  11-1
        T - Train BrainMaker.. . . . . . . . . . . . . . . . . .  11-1
        C - Continue Training BrainMaker.. . . . . . . . . . . .  11-1
        R - Run BrainMaker . . . . . . . . . . . . . . . . . . .  11-2
        F - File Maintenance . . . . . . . . . . . . . . . . . .  11-2
        E - Data Maintenance . . . . . . . . . . . . . . . . . .  11-2
        D - Shell out to DOS.. . . . . . . . . . . . . . . . . .  11-3
        Z - Configuration. . . . . . . . . . . . . . . . . . . .  11-3
        Q - Quit . . . . . . . . . . . . . . . . . . . . . . . .  11-3
        Alternative Version of SU. . . . . . . . . . . . . . . .  11-3

11.1  FILE MAINTENANCE . . . . . . . . . . . . . . . . . . . . .  11-5
        A - Add a Security . . . . . . . . . . . . . . . . . . .  11-5
        D - Delete Security. . . . . . . . . . . . . . . . . . .  11-7
        E - Edit Security. . . . . . . . . . . . . . . . . . . .  11-7
        F - Check Master for Data Consistency. . . . . . . . . .  11-7
        R - Read Master. . . . . . . . . . . . . . . . . . . . .  11-7
        Q - Quit . . . . . . . . . . . . . . . . . . . . . . . .  11-7

11.2  DATA MAINTENANCE . . . . . . . . . . . . . . . . . . . . .  11-9
        S - Select Security. . . . . . . . . . . . . . . . . .   11-10
        A - Add a Data Record. . . . . . . . . . . . . . . . .   11-10
        F - Find a Date. . . . . . . . . . . . . . . . . . . .   11-10
        E - Edit Data Record . . . . . . . . . . . . . . . . .   11-10
        D - Delete a Data Record . . . . . . . . . . . . . . .   11-10
        I - Insert a Data Record . . . . . . . . . . . . . . .   11-11
        P - Split Shares Adjustment. . . . . . . . . . . . . .   11-11
        V - Dividend Adjustment. . . . . . . . . . . . . . . .   11-11
        M - Scale Data . . . . . . . . . . . . . . . . . . . .   11-12
        Q - Quit . . . . . . . . . . . . . . . . . . . . . . .   11-13
        Dividend and Split Record Keeping. . . . . . . . . . .   11-13

11.0a Addendum to Chapter 11.0 . . . . . . . . . . . . . . . .   11-14
        G - Reformat Files for EXCEL, N-TRAIN and
                other Neural Networks. . . . . . . . . . . . .   11-15
        N-TRAIN Batch Files. . . . . . . . . . . . . . . . . .   11-20

References . . . . . . . . . . . . . . . . . . . . . . . . . . .   R-1

Appendix A
                 TUTOR - A TOUR Through STOCK PROPHET. . . . . .   A-1
        A.1 Basic Tutorial Example . . . . . . . . . . . . . . .   A-1
        A.2 Tutorial Example Showing the BrainMaker
                Interface. . . . . . . . . . . . . . . . . . . .   A-6
        Addendum to Appendix A . . . . . . . . . . . . . . . . .  A-23

Appendix B Basic BrainMaker Operation. . . . . . . . . . . . . .   B-1
        B.1  BrainMaker DOS Version 2.3. . . . . . . . . . . . .   B-1
                B.11  Training . . . . . . . . . . . . . . . . .   B-1
                B.12  Continue Training. . . . . . . . . . . . .   B-2
                B.13  Run BrainMaker Indicator . . . . . . . . .   B-3
        B.2  BrainMaker DOS Versions 2.5 and 3.0 . . . . . . . .   B-3
                B.21  Training . . . . . . . . . . . . . . . . .   B-3
                B.22  Continue Training. . . . . . . . . . . . .   B-4
                B.23  Run BrainMaker . . . . . . . . . . . . . .   B-4
        B.3  Using the BrainMaker Indicator. . . . . . . . . . .   B-5

Appendix C Files Used By STOCK PROPHET and
        BrainMaker . . . . . . . . . . . . . . . . . . . . . . .   C-1

Appendix D Operating with Windows Versions of
        BrainMaker . . . . . . . . . . . . . . . . . . . . . . .   D-1
        D.1  Installation of BrainMaker Windows 3.0
                Version  . . . . . . . . . . . . . . . . . . . .   D-1
        D.2  BrainMaker Training . . . . . . . . . . . . . . . .   D-3
        D.3  Running an Indicator using a Trained
                Network. . . . . . . . . . . . . . . . . . . . .   D-4
                D.31  Indicator Method #1. . . . . . . . . . . .   D-4
                D.32  Indicator Method #2. . . . . . . . . . . .   D-5

Appendix E - WPROF Utility . . . . . . . . . . . . . . . . . . .   E-1

Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   I-1

Order information