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to pursue day-trading system development

Should you wish to pursue day-trading system development, then I suggest you do so using Al-based models. However, be aware that the critical variable in all AI and NN systems is the learning model or "brain." If the learning paradigm is faulty or not capable of evaluating market variables, then the output will be useless or worse. Do not confuse the success of AI and NN models in industry with what can be achieved in the markets. What works on an assembly line will not necessarily work in the markets, where trader emotion and a host of random events must be considered as valid market inputs.

My last major point in this synopsis relates to public and professional reaction to this book. Having achieved some degree of name recognition and notoriety given my more than 30 books on trading and my 30 years as a trader, market analyst, author, public speaker, educator, and writer, there are those within the futures industry who take pleasure in attacking my ideas because they do not coincide with their market orientation. I have taken great care in this book to avoid throwing stones at any system, method, or indicator. I have maintained a purely objective approach, citing statistical research where I have it and differentiating opinion from fact where necessary. Hopefully, my work will not offend anyone. However, I am a realist. I know that, for one reason or another, there will be those who take issue with what I have said, with what I have discovered, with how I have applied it, with how I have written it, with how I have taught it, or with how I have suggested you apply it.

There will be those, for instance, who say I have overly optimized my results. To them I say that this is not the case. In fact, I have intentionally understated the results of my work so as to avoid giving anyone a false sense of what is possible. Some of the systems I have developed have shown a historical accuracy of over 80 percent with large average profits per trade as back-tested. I have not included these, since I feel that to do so would be too flamboyant. Furthermore, I feel that such back-test results were achieved by heavy optimization and would likely be unattainable in real time. To those who feel I have optimized my results too heavily I also say that the systems included herein contain nothing more than the standard variables that are known to be important inputs for any system. These are as follows:

ж A method of entry selection

ж A risk management stop loss

ж A method of exit selection

ж A method for trailing stop losses once a given profit has been achieved

The methods I have shared with you are all based on logical concepts and have strong face validity. They are therefore reality-based, testable, operational, and subjective. I have been careful to point out that few systems or methods will have a static set of indicators over time. As markets change, day traders must adjust their systems to such changes. And such changes will always be a function of market volatility. A fixed $500 stop loss will suffice in a relatively quiet market; however, it will be an invitation to destruction in a volatile market. Accordingly, I have encouraged you to be flexible in trading your systems, and I have given you some historical records to show you how differing degrees of market volatility require different degrees of risk as well as adjustments in timing signals. But the underlying concepts are what I stress. In other words, if you understand the concepts of my methods ands indicators, you will find it relatively simple to adjust the actual length of timing variables and the size of stop losses to the inherent characteristics of the markets.

And then there will be those who take issue with my insistence that day trading is a viable method for today's times. Know that I am being very clear when I state that day trading is not right for all traders. In fact, there are many aspiring traders as well as newcomers to trading who have no business trading and who, from the outset, are destined for failure. In order to overcome the notion that day trading is right for everyone or that trading is right for everyone, I have included my extensive writings on trader psychology, discipline, trader behavior, and the art versus the science of trading. Read them carefully if you haven't already done so