Automated Trading Profit > Automated Trading - Choosing Models Part 2
[My Trading Help] Ideally, I’d set a genetic algorithm on the job, to automatically develop an equity curve that is as smooth as possible by selecting the optimal models. A genetic algorithm would work by randomly selecting models, then retaining those that contributed the most towards the combination of overall equity curve smoothness and ending equity. This is a search function, and genetic algorithms are very good at this task. This would not eliminate the risk of models not performing as well in real life as initially expected, but would aid the selection process.
Some related posts from Technorati and Google.
[My Trading Help] Building Your Own Trading System - Part 4: In summary, genetic algorithms generate rules from data by rapidly trying out different combinations - they are a search tool. They are similar to Excel’s solver, but far more powerful. Genetic algorithms don’t do anything that trying every single possible combination of inputs doesn’t do, but they are far quicker, especially as the complexity of the data increases. Simulated annealing is a similar process.
[t] Ghost of onyx: "I have found three anomalies to the current bioaugmentation protocols." Deep Winter clapped his handed together and two gyrating collections of steel spheres appeared. "These represent the protein complexes miso-olanzapine and cyclodexione-4," Deep Winter explained, "which were secreted into the alteration regime."
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