On Friday morning I caught Wallstrip’s chat with Tim Wolters, of Collective Intellect, who uses statistical models to extract knowledge from unstructured data sources. I really enjoyed this episode because it highlights how you can use data mining to create Event Driven Analysis (EDA). Coincidently, I had beers with the Market Doctor last night where he explained to me that part of his PhD thesis was based on EDA. Well that just opened up about an hour of technical discussion as we downed our favorite brews. ...

** There are NEW livestream videos about RapidMiner! Visit my Channel here ** In Lesson 2, I went over the concept of MultiObjective Feature Selection (MOFS). In this lesson we’ll build on MOFS for our model but we’ll forecast the trend and measure it’s accuracy. Revisiting MOFS We learned in lesson 2 that RapidMiner can simultaneously select the best features in your data set while maximizing the performance. We ran the process and the best features were selected below. ...

Good Morning. Yesterday’s currency sell-off triggered several of my buy orders as the EURUSD and GBPUSD pairs dropped through support after support. The end result was that I started to pyramid losses. However, I stuck to my trading plan and planned for a long wild ride. In case any new readers are wondering, I will (re)post my trading plan on this blog later today. Finally, overnight the pairs started to firm up and now my GBPUSD pair is showing a nice profit as it heads back to the magic $2.00 level. The same with my EURUSD position but it’s still underwater at bit. I have confidence that both pairs will climb back to their highs because the my neural trend models continue to show a strong Euro and Pound relative to the dollar. In other words the Euro and Pound’s trend remains up. In fact the signal coming from the Pound is a “STRONG UP!” ...

Does anybody remember the Seinfeld episode where George Costanza started doing everything opposite? His life turned around and he women, fame, and fortune. Well I had George Costanza moment yesterday (ed. Repost from Digital Breakfast) . I'm trying a new currency trading strategy that does a few things opposite of what I did before. Here's the revised and stripped down Forex trading plan. - Concentrate on five major pairs as defined by Oanda.com. They are: EUR/USD ...

EWM was good to me in the past, too bad I sold it! Update EWM. What a great ETF for investing into the Asia area. This is one of those emerging market ETF’s that I should’ve held onto for the past 13 years. Once again I’m going to repeat what I wrote about passive investing: diversify, buy low cost mutual funds/ETFs, and dollar cost average. Look at EWM now, trading around $27. It’s not that high as I would’ve liked it to be, especially after 13 years but that’s the risk you take investing. However, price appreciation is just one part of the equation when it comes to making money in the markets long term, the other is yield. ...

I was inspired to generate three data graphs from my currency models for my readers after reading Maoxian's post on the British Pound. These graphs show price relationships between the Euro and the US Dollar Index, the Euro and the British Pound, and finally the Euro and the Swiss Franc. Euro/USD Index Euro/British Pound Euro/Swiss Franc With the exception of the Euro/British Pound, the price relationship between the Euro, USD Index, and the Swiss Franc is pretty much linearly correlated. :)

** There are NEW livestream videos about RapidMiner! Visit my Channel here ** In this tutorial I want to show you how to use MultiObjective Feature Selection (MOFS) in RapidMiner**. **It’s a great technique to simultaneously reduce your attribute set and maximize your performance (hence: MultiObjective). This feature selection process can be run over and over again for your AI Financial Market Model, should it begin to drift. Load in the Process from Tutorial One Start by reading the Building an AI Financial Market Model – Lesson 1 post. At the bottom of that post you can download the RapidMiner process. ...

Good Morning! The results are in for this week’s currency neural net model. Aussie D - RANGE British Pound- STRONG UP USD - DOWN Euro - UP Yen - DOWN Swiss Franc - UP What I'm seeing is that the Aussie D has probably topped out for the near term, while the British Pound is breaking out. Long term trends in the Euro and USD remain, as well as the Yen. What's interesting to note is that the Yen and Swiss Franc have been seeing a lot of intraweek trend flips. Although this week the trends show a DOWN and UP for the Yen and Franc, respectively, it's still too early to tell if this is indeed the beginnings of new trends. An UP trend in the Franc could mean near term topping in the Euro so we'll be watching these two currencies closely to see what they're going to do!

Just a quick snapshot from my Gold model. I created and use a machine learned/neural net model to generate BUY/SELL/HOLD signals. This particular model analyzed several input variables and then selected the best one based on a genetic algorithm. The trend remains UP. :)

Before you can begin with building your own AI Financial Market Model (machine learned), you have to decide on what software to use. Since I wrote this article in 2007, many new advances have been made in machine learning. Notably the python module Scikit Learn came out and Hadoop was released into the wild. I’m not overly skilled in coding and programming – I know enough to get by- I settled on RapidMiner. RapidMiner is a very simple visual programming platform that let’s you drag and drop “operators” into a design canvas. Each operator has a specific type of task related to ETL, modeling, scoring, and extending the features of RapidMiner. ...