ChaosHunter Compared to Existing Advanced Modeling Techniques

Like regression and neural networks, ChaosHunter®, builds equations which best match data and observations. Unlike those more traditional systems, ChaosHunter® is not bound by any a priori assumptions about the structure of modeling equations. Like regression, it builds "readable" equations, unlike the undecipherable equations neural networks can produce. As a consequence of producing equations more meaningful to humans, these equations sometimes do not match the existing data as closely as neural networks, although ChaosHunter® often finds underlying relationships that extrapolate better into the "out-of-sample" unseen data. In other words, they are often more robust.

Like genetic programming, ChaosHunter® uses evolutionary optimization strategies to find modeling equations, which result in some very dynamical forms. Unlike genetic programming, "chromosomes" are a fixed length, so it does not allow chromosomes to be equations or hierarchies of equations. Our method is based on Richard Forsyth's older 1985 methods rather than John Koza's 1988 innovations. However, we believe our method is effective yet inherently reduces the equation complexity, and thus can create robust models with less propensity to "over-fit". In any case, genetic programming is patented, which might subject commercial users to royalty payments.

// Important Information and Disclaimers

Financial trading comes with substantial risk of loss, including possible loss of principal and other losses, even when using computerized trading methods, formulas, and systems. Success of a formula or trading method in the past does not guarantee or even imply success in the future. The use of any trading system or strategy does not and cannot guarantee that you will make profits, increase profits or minimize losses. Additionally, trading results based upon hypothetical or historically-tested trading systems do not necessarily compare to results of actual trading. No hypothetical or historical trading record can completely account for the level of risk present in actual trading. There is no guarantee that your hypothetical trading results, even if tested against historical data, will produce comparable actual trading results. In fact, there are frequently sharp differences between hypothetical or historically-tested performance results and the actual results subsequently achieved by any particular trading system or strategy. You agree that you understand the risks.

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