Genetic Algorithms - Fuzzy Logic - Chaos
scans for oversold and overbought conditions in
Normal - Sideways - Volatile - Markets

Note: All results are hypothetical.

I first developed the ATS-3200 for myself, therefore both systems were designed for the benefit of traders. The systems trade only 4 to 6 times per year on average. This helps to keep trading costs low, and at the same time generate substantial profits per average trade.

These are long term trading systems, using Genetic Algorithms, Fuzzy Logic and Chaos. The ATS-3200 trades T-Bonds(US) and the ATS-6400 trades T-Notes(TY). Both read weekly price data to reduce noise, and use adaptive filters to stay with the trend and eliminate whipsaw losing trades for maximum profits.

The systems use genetic algorithms to detect an over bought or an over sold market. This enables the systems to go short near market tops and long near market bottoms with an almost 80% accuracy.

Each algorithm tracks one main indicator, but only generates a "BUY" near a market bottom, or a "SELL" near a market top, if the trade can be verified by other indicators for more accurate trading signals.

The adaptive algorithms are grouped together into two neural networks. The "X" network scans the market for over bought market conditions, and the "L" network scans the market for over sold market conditions.

Built into the systems are a number of functions to control risk, limit drawdowns and reduce the number of losing trades.

Using a combination of pattern recognition and adaptive indicators the Systems are able to quantify market activity and pinpoint over bought and over sold conditions that offer excellent trading opportunities with long term potential for substantial profits, while reducing risk and limiting drawdowns.

To succeed as a futures trader you need these 3 basic qualities:

An Advantage. You get this by following a good trading system, one that has proven itself in real-time trading. The system must issue clear and objective signals. This will help you trade without any emotions to distract you from your long term objectives.

Discipline. You must have the discipline to follow the system. Once you second guess a system, it becomes useless to you. You must also be able to conquer fear and greed.

Adequate Funds. You must always be conservative and have adequate margin funds for each contract traded. Trading is like any other business, you must be well capitalized to succeed in the long run.

Every market is different and has its own character. Would you drive the same car across the Sahara desert and to the North Pole. Of course you would not. They are two different environments that demand different technologies. I believe the same logic should apply to trading systems. A system designed to trade all markets cannot be very efficient in any one market and normally has a tendency to go into deep drawdowns, with very small average profits per trade and poor performance ratios. Trading is more complex than this, and to be really successful in this business you need more sophisticated tools.

Both systems are very easy to follow, and should take very little of your time. You only need to update the price file once a week, after the market closes on Friday. By not following the market too closely on a day to day basis, you reduce the risk of being influenced by the usual intraday reversals, and will be able to stay objective about your long term goal.


ATS-3200: Equity Chart
Trading 1 contract only.


ATS-3200: Annual Returns
Trading one contract only.
Primary Trades Only.


 YEAR       PROFIT/YR    TOT-PROFIT
 1983        8,968.75      8,968.75
 1984       20,187.50     29,156.25
 1985       20,750.00     49,906.25
 1986       46,500.00     96,406.25
 1987       34,531.25    130,937.50
 1988       25,656.25    156,593.75
 1989       24,562.50    181,156.25
 1990       30,468.75    211,625.00
 1991        2,500.00    214,125.00
 1992       17,625.00    231,750.00
 1993       27,187.50    258,937.50
 1994       16,750.00    275,687.50
 1995       28,906.25    304,593.75
 1996       27,875.00    332,468.75
 1997       20,718.75    353,187.50
 1998       22,281.25    375,468.75
 1999        8,593.75    384,062.50
 2000       30,312.50    414,375.00
 2001       10,187.50    424,562.50
 2002        8,968.75    433,531.25
 2003       21,250.00    454,781.25
 2004        4,656.25    459,437.50
 2005        3,937.50    463,375.00
 2006        6,437.50    469,812.50
 2007        1,125.00-   468,687.50


ATS-3200: Full List of Trades
Trading one contract only.

                           ATS-3200 Trade Summary Report
                                Primary trades only.

 No. Date-In DateOut T   Buy   Sell  Wks  R/O   Profit ClsDdown  MaxDdown  Trade-Status
   1 18MAR83 20MAY83 L  75-18  77-04  10   0     1,562        0       437  Long: Stopped.
   2 20MAY83 05AUG83 X  69-03  76-10  11  20-    6,593      125       562  Short
   3 05AUG83 04NOV83 L  69-03  69-31  13  18-    1,437        0       843  Long
   4 04NOV83 06JAN84 X  70-12  69-31   9  18-      968-   1,937     2,125  Short
   5 06JAN84 17FEB84 L  70-12  69-13   6   0       968-     312       375  Long
   6 17FEB84 11MAY84 X  61-14  69-13  12  21-    7,312        0       281  Short
   7 11MAY84 23NOV84 L  61-14  73-08  28  45-   13,218    1,125     2,000  Long
   8 23NOV84 12APR85 X  70-24  73-08  20  56-      750      843     1,718  Short
   9 12APR85 14JUN85 L  70-24  78-09   9  30-    8,468        0       437  Long
  10 14JUN85 05JUL85 X  79-00  78-09   3   0       718-       0       843  Short
   * 05JUL85 19JUL85 *   -*-    -*-    2             0                     Out of the market.
  11 19JUL85 09AUG85 X  76-13  76-14   3   0        31        0         0  Short: Stopped.
  12 09AUG85 06SEP85 X  74-10  76-13   4  38-      906    1,312     1,906  Short
  13 06SEP85 18APR86 L  74-10 103-28  32  58-   31,375        0       500  Long
  14 18APR86 30MAY86 X  93-28 103-28   6   0    10,000        0       531  Short
  15 30MAY86 05SEP86 L  93-28  96-15  14  70-    4,781        0     2,250  Long
  16 05SEP86 19SEP86 X  92-18  96-15   2   0     3,906        0       500  Short
  17 19SEP86 30JAN87 L  92-18  99-22  19  33-    8,156        0         0  Long
  18 30JAN87 24APR87 X  89-18  99-22  12  34-    9,062    2,125     2,968  Short
  19 24APR87 15MAY87 L  89-18  88-28   3   0       687-       0     1,156  Long
   * 15MAY87 05JUN87 *   -*-    -*-    3             0                     Out of the market.
  20 05JUN87 17JUL87 L  90-21  92-09   6   0     1,625        0     1,187  Long
  21 17JUL87 16OCT87 X  77-30  92-09  13  30-   13,406        0         0  Short
  22 16OCT87 05FEB88 L  77-30  94-30  16  30-   17,937        0     1,718  Long
  23 05FEB88 20MAY88 X  85-14  94-30  15  33-    8,468        0       437  Short
  24 20MAY88 22JUL88 L  85-14  86-08   9  30-    1,750        0       343  Long
  25 22JUL88 26AUG88 X  84-28  86-08   5   0     1,375      531     1,750  Short
  26 26AUG88 11NOV88 L  84-28  88-21  11  19-    4,375        0        93  Long
  27 11NOV88 25NOV88 X  87-11  88-21   2   0     1,312        0       593  Short
  28 25NOV88 03FEB89 L  87-11  90-28  10  11-    3,875        0       281  Long
  29 03FEB89 17MAR89 X  86-19  90-28   6   1     4,312        0       750  Short
  30 17MAR89 07JUL89 L  86-19  97-31  16   3-   11,468        0       312  Long
  31 07JUL89 29SEP89 X  95-27  97-31  12   1-    2,093    1,031     3,312  Short
  32 29SEP89 22DEC89 L  95-27  99-23  12   0     3,875        0       156  Long
  33 22DEC89 20APR90 X  89-17  99-23  17   4-   10,062        0         0  Short
  34 20APR90 03AUG90 L  89-17  93-14  15   7-    4,125      937     1,312  Long
  35 03AUG90 24AUG90 X  87-15  93-14   3   0     5,968        0         0  Short
  36 24AUG90 07DEC90 L  87-15  96-20  15  27-   10,000        0       156  Long
  37 07DEC90 01FEB91 X  97-17  96-20   8   0       906-      62     1,281  Short
   * 01FEB91 22FEB91 *   -*-    -*-    3             0                     Out of the market.
  38 22FEB91 05APR91 X  96-13  97-04   6  22-       31        0       625  Short: Stopped.
  39 05APR91 14JUN91 X  93-00  96-05  10  26-    2,343      250     1,187  Short
  40 14JUN91 20SEP91 L  93-00  99-04  14  27-    6,968      406       750  Long
  41 20SEP91 20DEC91 X 101-13  99-04  13  31-    3,250-   2,343     3,156  Short: Stopped.
   * 20DEC91 17JAN92 *   -*-    -*-    4             0                     Out of the market.
  42 17JAN92 28FEB92 X 101-05 102-20   6   0     1,468        0       625  Short: Stopped.
   * 28FEB92 03APR92 *   -*-    -*-    5             0                     Out of the market.
  43 03APR92 21AUG92 L  99-24 105-22  20  35-    7,031    1,531     2,468  Long
  44 21AUG92 06NOV92 X 101-15 105-22  11  40-    2,968    1,500     2,812  Short
  45 06NOV92 05MAR93 L 101-15 111-17  17  81-   12,593        0        62  Long
  46 05MAR93 21MAY93 X 109-24 111-17  11   0     1,781      656     1,562  Short
  47 21MAY93 03SEP93 L 109-24 119-31  15  81-   12,750        0       500  Long
  48 03SEP93 05NOV93 X 115-13 119-31   9   0     4,562    1,968     2,218  Short
  49 05NOV93 28JAN94 L 115-13 117-14  12  40-    3,281      406     1,125  Long
  50 28JAN94 01APR94 X 104-20 117-14   9  32-   11,812        0       375  Short
  51 01APR94 08JUL94 L 104-20 100-18  14  30-    3,125-   2,343     3,500  Long
   * 08JUL94 22JUL94 *   -*-    -*-    2             0                     Out of the market.
  52 22JUL94 05AUG94 L 102-22 103-03   2   0       406        0       781  Long: Stopped.
  53 05AUG94 09SEP94 L 103-03  99-25   5  29-    2,406-     312     1,375  Long
  54 09SEP94 04NOV94 X  96-07  99-25   8   0     3,562        0     1,093  Short
  55 04NOV94 26MAY95 L  96-07 112-03  29  38-   17,062      156       187  Long
  56 26MAY95 02JUN95 X 115-03 112-03   1   0     3,000-       0         0  Short: Stopped.
  57 02JUN95 11AUG95 X 109-05 114-28  10  10-    5,406      750     1,625  Short
  58 11AUG95 05JAN96 L 109-05 120-09  21  22-   11,812        0       406  Long
  59 05JAN96 19JAN96 X 120-08 120-09   2   0        31        0       625  Short: Stopped.
  60 19JAN96 05APR96 X 109-13 121-16  11  16-   11,593        0         0  Short
  61 05APR96 09AUG96 L 109-13 112-02  18  18-    3,218    2,656     3,343  Long
  62 09AUG96 20SEP96 X 107-24 112-02   6  17-    3,781        0       437  Short
  63 20SEP96 29NOV96 L 107-24 115-28  10  12-    8,500        0       312  Long
  64 29NOV96 11APR97 X 106-20 115-28  19  16-    8,750        0       656  Short
  65 11APR97 01AUG97 L 106-20 114-26  16  13-    8,593        0       125  Long
  66 01AUG97 19SEP97 X 114-14 114-26   7  12-        0        0       375  Short: Stopped.
  67 19SEP97 09JAN98 L 115-21 123-21  16   6-    8,187      812     1,156  Long
  68 09JAN98 05JUN98 X 121-22 123-21  21  16-    1,468        0       625  Short
  69 05JUN98 02OCT98 L 121-22 133-02  17   4-   11,500        0       281  Long
  70 02OCT98 11JUN99 X 113-26 133-02  36  40-   18,000        0     2,187  Short
  71 11JUN99 08OCT99 L 113-26 112-18  17  12-      875-     593       937  Long
   * 08OCT99 29OCT99 *   -*-    -*-    3             0                     Out of the market.
  72 29OCT99 17DEC99 L 113-19  91-26   7 602-    2,968-   1,375     2,531  Long
  73 17DEC99 21JAN00 X  89-23  91-26   5   0     2,093        0       343  Short
  74 21JAN00 07APR00 L  89-23  99-11  11  11-    9,968        0        93  Long
  75 07APR00 12MAY00 X  93-16  99-11   5   0     5,843        0       531  Short
  76 12MAY00 25AUG00 L  93-16 100-14  15   3-    7,031      218       750  Long
  77 25AUG00 17NOV00 X 100-12 100-14  12   1        93      156       875  Short
  78 17NOV00 22DEC00 L 100-12 105-19   5   1     5,187        0        31  Long
  79 22DEC00 16MAR01 X 106-17 105-19  12  11-    1,281-     156     1,031  Short
  80 16MAR01 30MAR01 L 106-17 104-06   2   0     2,343-     406       687  Long
  81 30MAR01 04MAY01 X 102-20 104-06   5   0     1,562      468       687  Short: Stopped.
   * 04MAY01 08JUN01 *   -*-    -*-    5             0                     Out of the market.
  82 08JUN01 29JUN01 L 100-08 100-08   3   0         0        0         0  Long: Stopped.
  83 29JUN01 31AUG01 L 100-10 105-10   9  24-    5,750        0       531  Long
  84 31AUG01 26OCT01 X 107-22 105-10   8   0     2,375-   1,468     2,031  Short
   * 26OCT01 02NOV01 *   -*-    -*-    1             0                     Out of the market.
  85 02NOV01 07DEC01 X  99-15 109-10   5  34-    8,781    1,125     2,593  Short
  86 07DEC01 08MAR02 L  99-15  98-29  13  37-      593        0     1,437  Long
  87 08MAR02 12APR02 X 100-31  98-29   5   0     2,062-   1,687     1,875  Short
  88 12APR02 11OCT02 L 100-31 112-10  26  75-   13,687      781     1,343  Long
  89 11OCT02 01NOV02 X 110-24 112-10   3   0     1,562        0         0  Short: Stopped.
  90 01NOV02 27DEC02 X 112-27 110-11   8  40-    3,750-   2,625     3,281  Short
  91 27DEC02 21MAR03 L 112-27 112-31  12  43-    1,468    3,812     4,312  Long: Stopped.
  92 21MAR03 02MAY03 X 114-06 109-22   6   0     4,500-   3,718     4,031  Short: Stopped.
  93 02MAY03 13JUN03 L 113-16 122-21   6  41-   10,437        0       343  Long
  94 13JUN03 25JUL03 X 109-21 122-21   6   0    13,000        0       406  Short
  95 25JUL03 01AUG03 L 109-21 106-21   1   0     3,000-       0         0  Long: Stopped.
   * 01AUG03 12SEP03 *   -*-    -*-    6             0                     Out of the market.
  96 12SEP03 03OCT03 L 107-22 109-05   3   0     1,468        0       812  Long: Stopped.
  97 03OCT03 28NOV03 L 108-28 107-27   8  46-      406    2,031     3,187  Long: Stopped.
  98 28NOV03 12DEC03 L 107-27 107-28   2   0        31        0     1,343  Long: Stopped.
  99 12DEC03 02JAN04 L 108-31 109-12   3   0       406        0       500  Long: Stopped.
 100 02JAN04 09JAN04 X 110-13 107-29   1   0     2,500-       0         0  Short: Stopped.
 101 09JAN04 16JAN04 X 112-18 111-09   1   0     1,281-       0         0  Short
   * 16JAN04 23JAN04 *   -*-    -*-    1             0                     Out of the market.
 102 23JAN04 27FEB04 X 112-14 111-27   5  46-    2,031-     843     1,593  Short
   * 27FEB04 26MAR04 *   -*-    -*-    4             0                     Out of the market.
 103 26MAR04 23APR04 X 107-15 114-04   4   0     6,656        0         0  Short
 104 23APR04 30APR04 L 107-15 107-03   1   0       375-       0         0  Long
   * 30APR04 14MAY04 *   -*-    -*-    2             0                     Out of the market.
 105 14MAY04 01OCT04 L 104-12 111-15  20  81-    9,625        0       156  Long
 106 01OCT04 22OCT04 X 114-06 111-15   3   0     2,718-   1,531     2,406  Short
   * 22OCT04 05NOV04 *   -*-    -*-    2             0                     Out of the market.
 107 05NOV04 04FEB05 X 115-29 112-08  13  30-    4,593-   3,343     3,562  Short
   * 04FEB05 18FEB05 *   -*-    -*-    2             0                     Out of the market.
 108 18FEB05 01APR05 X 111-24 113-30   6  23-    1,468       31       468  Short: Stopped.
   * 01APR05 15APR05 *   -*-    -*-    2             0                     Out of the market.
 109 15APR05 15JUL05 L 113-18 116-13  13   3-    2,937        0       281  Long
 110 15JUL05 05AUG05 X 114-06 116-13   3   0     2,218        0       218  Short
 111 05AUG05 02SEP05 L 114-06 117-23   4  11-    3,875        0       437  Open trade, Long.
   * 14OCT05 18NOV05 *   -*-    -*-    5             0                     Out of the market.
 112 18NOV05 27JAN06 L 112-15 112-21  10   7-      406      375     1,000  Long: Stopped.
 113 27JAN06 14APR06 X 107-03 112-29  11   1     5,843      375       625  Short
 114 14APR06 05MAY06 L 107-03 106-16   3   0       593-     250       937  Long
   * 05MAY06 19MAY06 *   -*-    -*-    2             0                     Out of the market.
 115 19MAY06 01SEP06 L 107-05 111-04  15   6     3,781    1,312     1,562  Long
 116 01SEP06 24NOV06 X 113-15 111-04  12   1     2,312-   1,843     2,468  Short
   * 24NOV06 15DEC06 *   -*-    -*-    3             0                     Out of the market.
 117 15DEC06 09FEB07 X 111-07 112-22   8   0     1,468        0       500  Short: Stopped.
   * 09FEB07 16FEB07 *   -*-    -*-    1             0                     Out of the market.
 118 16FEB07 06APR07 L 111-16 110-10   7   2-    1,125-     187       593  Long
 119 06APR07 01JUN07 X 108-16 110-10   8   0     1,812    1,531     2,000  Short
 120 01JUN07 08JUN07 L 108-16 106-16   1   0     2,000-       0         0  Long: Stopped.
 121 08JUN07 14SEP07 L 106-21 112-27  14   5-    6,343      562     1,875  Open trade, Long.


 Notes: 1. The ATS-3200 was completed in June 1993, and generated the first "SELL" signal
           on September 3rd, 1993.
        2. Wks - is the number of weeks in the trade.
        3. R/O - is the total rollover amount in ticks(1/32), when a trade is rolled over
           from one month to the next.
        4. Profit - is the profit or loss of each trade.
        5. ClsDown - is the trade drawdown from the entry point.
        6. MaxDown - is the trade drawdown from the week's high(short) or low(long).


ATS-3200: Trading Signals
The ATS-6400 generates the same signals.

The market is over sold: BUY
The market is over bought: SELL
Signal to BUY during a long trade.
Signal to SELL during a short trade.
The major trend is up.
The major trend is down.
Signal to get out of the market.
Signal to stay out of the market.


ATS-3200: Stop Loss Levels
Every week the stop is calculated by the system depending on market volatility,
and is clearly reported on a separate report for your protection.

Sample stop loss report. 
12DEC03 PLACE A SELL STOP $4500 BELOW THE CLOSE OF FRIDAY 12DEC03 AT 104-15
19DEC03:==> RAISE THE SELL-STOP TO 109-00
26DEC03:==> RAISE THE SELL-STOP TO 109-12
02JAN04 PLACE A BUY  STOP $2500 ABOVE THE CLOSE OF FRIDAY 02JAN04 AT 110-13
09JAN04 PLACE A BUY  STOP $2500 ABOVE THE CLOSE OF FRIDAY 09JAN04 AT 113-25
23JAN04 PLACE A BUY  STOP $2500 ABOVE THE CLOSE OF FRIDAY 23JAN04 AT 114-11
06FEB04 PLACE A BUY  STOP $2500 ABOVE THE CLOSE OF FRIDAY 06FEB04 AT 114-21
13FEB04 PLACE A BUY  STOP $2500 ABOVE THE CLOSE OF FRIDAY 13FEB04 AT 115-06
20FEB04 PLACE A BUY  STOP $2500 ABOVE THE CLOSE OF FRIDAY 20FEB04 AT 114-24
26MAR04 PLACE A BUY  STOP $4500 ABOVE THE CLOSE OF FRIDAY 26MAR04 AT 118-20
02APR04:==> LOWER THE  BUY-STOP TO 112-21
09APR04:==> LOWER THE  BUY-STOP TO 112-18
16APR04:==> LOWER THE  BUY-STOP TO 111-04
23APR04 PLACE A SELL STOP $2500 BELOW THE CLOSE OF FRIDAY 23APR04 AT 104-31
14MAY04 PLACE A SELL STOP $3000 BELOW THE CLOSE OF FRIDAY 14MAY04 AT 101-12
28MAY04:THE SELL-STOP SHOULD BE AT 100-01 ROLLOVER WEEK SEPTEMBER BONDS
27AUG04:THE SELL-STOP SHOULD BE AT  98-27 ROLLOVER WEEK DECEMBER BONDS
01OCT04 PLACE A BUY  STOP $4500 ABOVE THE CLOSE OF FRIDAY 01OCT04 AT 115-31
08OCT04:THE  BUY-STOP SHOULD BE AT 115-31
15OCT04:THE  BUY-STOP SHOULD BE AT 115-31
05NOV04 PLACE A BUY  STOP $4500 ABOVE THE CLOSE OF FRIDAY 05NOV04 AT 116-24
12NOV04:THE  BUY-STOP SHOULD BE AT 116-24
19NOV04:THE  BUY-STOP SHOULD BE AT 116-24
26NOV04:THE  BUY-STOP SHOULD BE AT 115-26 ROLLOVER WEEK MARCH BONDS
03DEC04:THE  BUY-STOP SHOULD BE AT 115-26
10DEC04:THE  BUY-STOP SHOULD BE AT 115-26
17DEC04:THE  BUY-STOP SHOULD BE AT 115-26
24DEC04:THE  BUY-STOP SHOULD BE AT 115-26
31DEC04:THE  BUY-STOP SHOULD BE AT 115-26
07JAN05:THE  BUY-STOP SHOULD BE AT 115-26
14JAN05:THE  BUY-STOP SHOULD BE AT 115-26
21JAN05 PLACE A BUY  STOP $2000 ABOVE THE CLOSE OF FRIDAY 21JAN05 AT 116-12
28JAN05 PLACE A BUY  STOP $2000 ABOVE THE CLOSE OF FRIDAY 28JAN05 AT 116-21
18FEB05 PLACE A BUY  STOP $4500 ABOVE THE CLOSE OF FRIDAY 18FEB05 AT 118-14
25FEB05:THE  BUY-STOP SHOULD BE AT 117-23 ROLLOVER WEEK JUNE BONDS
04MAR05:THE  BUY-STOP SHOULD BE AT 117-23
11MAR05:THE  BUY-STOP SHOULD BE AT 117-23
18MAR05:THE  BUY-STOP SHOULD BE AT 117-23
25MAR05:==> LOWER THE  BUY-STOP TO 111-24
15APR05 PLACE A SELL STOP $4500 BELOW THE CLOSE OF FRIDAY 15APR05 AT 109-02
22APR05:THE SELL-STOP SHOULD BE AT 109-02
29APR05:THE SELL-STOP SHOULD BE AT 109-02


ATS-3200: System Reports
Reports generated by the systems.

  • The Detail Report: shows all the indicators and parameters the System uses to generate the trading signals. It also records each trade as it happens, the profit or loss to date, the drawdown and the generating algorithm.

  • The Profit Report: shows only the entry and exit from the trades. It shows drawdowns, profit per trade and total system profit. It is a summary of every primary trade of the System. Only the primary trades are listed.

  • The Summary Report: shows the date in and date out of each trade. It shows the buy and sell prices, the number of weeks in the trade, the profit and maximum drawdown of each trade.

  • The Yearly Profit Report: Records the profit or loss of the system year by year.

  • The Secondary Trades Report: gives details of the trades that the System generates, after the primary trade, during the life cycle of a complete trade.

  • The Stoploss Report: keeps a record of all the stops placed by the System. It also records each time the System moves the stop and must be checked weekly for any adjustments to the stop that may have to be made.

  • The Trades Report: This is a report of the trades from each algorithm recorded separately.

  • The Sideways Markets Report: This special report will highlight periods when the market is moving sideways.


ATS-3200: System Functions and Algorithms
What makes the systems tick.

The ATS-3200 trading system is made up of a number of functions and algorithms, each complementing the other. Once you understand how each part of the system improves the performance of the whole, you should be able to trade with confidence and without Fear or Stress. The ATS-6400 works the same way.

The Functions.

The Primary Indicator. This is a long term 11 week stochastic. The system tries to go short with values above 85% and long with values below 15%.

The Primary "F" Filter. This is an adaptive simple filter that filters out insignificant trend reversals to avoid whipsaw losing trades. It adjusts itself to slow, medium and fast markets. It also changes in sideways markets, near tops and bottoms, and as the market moves higher and higher and becomes more volatile.

The Stop Loss Function. This functions calculate the stop on each new trade and handles how stopped out trades are treated. The function will prevent the system from entering the market if it is too high(over bought) to go long, or too low(over sold) to go short, after being stopped out. In each case we get a signal to "STAY OUT", after being stopped out.

The Drawdown Parameter. This parameter takes the system out of the market, if the trade is losing more than $250 (default value) at the close on Friday. Again this function will prevent the system from going long if the market is too high(over bought), or short if the market is too low(over sold). However the function will keep the system in the trade if the market is moving in the direction of the trade, otherwise the system gives a signal to "GET OUT".

The Trailing Stop Function. This function works with non neural network trades only. When the system detects that a trade is profitable, it starts moving the stop to protect profits, and to prevent a winning trade from turning into a losing trade. It adapts itself in sideways markets. However the most dramatic effect this function has on the performance of the system, is to cut down on the number of consecutive losing trades. You can run tests on the system, with and without this function to see the difference it makes.

The Algorithms.

The V-Filtes. This is a network of simple algorithms which try to keep the System with the major market trend. When the stochastic changes from positive to negative and vice versa, during a trade, the new signal is sent to the V-Filtering system for verification. If it is intercepted by any of the algorithms, it will be cancelled and the system stays long or short with the major trend.

The X-Algorithms. These are trained genetic algorithms. Each one tracks a specific indicator, but will only go short if the signal from that indicator is verified by other indicators. When all the indicators signal an overbought market condition, the algorithm generates a "SELL" signal. Many of the algorithms are adaptive and formulated. Two of the algorithms are designed to track sideways markets only.

The L-Algorithms. These are trained genetic algorithms. Each algorithm tracks a specific indicator for an oversold market condition. It will only go long if the signal from that indicator is verified by other indicators. When all the indicators signal an extreme market low the algorithm generates a "BUY" signal. Many of the algorithms are adaptive and formulated. Two of the algorithms are designed to track sideways markets only.


ATS-3200: Sideways Markets
Trading in Sideways Markets.

Sideways markets can be tough for a trend following system.

But they don't have to be.

Sideways markets can be profitable. Why! Because a sideways market is predictable. You know it is not going to go up and it is not going to go down. A sideways market moves sideways and fluctuates in a narrow channel usually over a long period of time. If a system can detect such a market, a sideways market can offer many profitable trading opportunities.

Built into the ATS-3200 and the ATS-6400, are 4 indicators, shown on the sidways report as N1, N2, N3 and N4. These "chaos" indicators have been successful in correctly tracking sideways markets in the bonds over the last 20 years and have also generated numerous profitable trades in real time. The most spectacular of these was in January of 1996.

If you study the sideways market report you will clearly see that whenever these 4 indicators register high values, the bonds and the notes enter into a prolonged sideways market that sometimes last for months.

There are two ways of trading a sideways market. Such a market usually fluctuates in a narrow channel of between $4000 to $5000. The System will signal that the bonds have entered into a sideways market when readings in both N1 and N2 are over 10, and N3 and N4 start appearing on the report also. PMVS will give you approximately the magnitude of the channel, and this can be easily verified by checking the daily price chart. Once this is established, sell orders can be entered at the top of the channel and buy orders can be entered at the bottom of the channel. When the values in N1 and N2 are less than 10, it means the sideways market has ended.

The second way to trade a sideways market is to write options, since their value will depreciate very rapidly over time.

Please read carefully: Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also since the trades have not actually been executed the results may have under-or-over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact they are designed with the benefit of hindsight. No representation is being made that any account has or is likely to achieve profits or losses similar to those shown.

Past performance is no guarantee of future profits.