Mark's primary philosophy is to “limit risk first.”  This can be done by reducing the amount of time clients are invested in equities.  The company does quite well considering its conservative mandate, and thanks in large part to the NeuroShell Trader Professional.  Mark's conservative trading strategy is able to capture about 85% of the potential profit in an up market.  "I'm only interested in the ‘gravy’, which is why I limit the amount of time invested in equities," Mark explains.

Mark used a competitor's neural net system several years ago, without much success.  He liked the concept of a neural net being able to weight input factors automatically, but the package he previously purchased was "just too laborious to use."  So, Mark was a little soured on artificial intelligence until an acquaintance bragged about building a successful neural net and offered to sell it to him for $250,000!

Mark figured if his acquaintance could do that, he could too, so he talked to a Ward Systems Group representative and purchased the NeuroShell Trader Professional.

He has designed a model which combines major aspects of the NeuroShell Trader Pro: first, the ability to build neural network trading models and next, incorporate the nets into the Trading Strategy Wizard.  Mark, although guarded, was willing to give us some information about the model he has constructed.  The model is a neural network trading strategy and generates about 8 trades a year. 

Capital Growth Services trades no-load mutual funds long only.  Mark's "secret", so to speak, is that he makes his predictions using only the Nasdaq composite, but then makes the trades using growth mutual funds.

"My neural net inputs are exponential moving averages and Wilder's indicators; just basic stuff," says Mark.  "I also have some price momentum, but I use no volume indicators.  I predict the close one or two days out, using a 3 year training set with 2 six month walk forward tests."

Mark does optimize his inputs using Return on Account as the objective function.  Interestingly, he uses the full 80 hidden neurons during optimization which we normally recommend against because it takes too long and increases the danger of over-fitting.  Mark has considered that, however, and he takes care of those two problems by severely limiting the range of the variables during optimization.

"You guys should be asking $5,000 for the Trader Professional," he laughingly told our interviewer.  "It is one of the most powerful pieces of trading software ever developed.  A person will never be able to try all the features, because they'll be making a ton of money before they even get close."

Update: 3/20/00

Mark has been using Adaptive Net Indicators lately and has forwarded the following comments: "Do Adaptive Net Indicators work? YES! Are they fast? YES! But most importantly, would I recommend them and are they fun to work with? YES and YES!"

"My goal is to cut whipsaw trades out of my strategies. Using these indicators it is possible to predict the next days value and base a decision on that prediction. By doing this, I have been able to remove unprofitable trades. One more great product by the folks at Ward Systems!"

Mark with his Dodge Viper