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ANNI's Frequently Asked Questions If the best solutions disagree on direction when viewing them in the large graph, does this mean it is not a good system? The first and foremost reason is usually not enough training. If you haven't completed at least 15 generations (or a few new generations after the data file has been updated), continue to train before further analysis. Aside from that, having solutions disagree means the Prediction System is doing what it's supposed to. What ANNI is basically doing is picking up on multiple signals rather than one, which can obviously vary. When using ANNI's output though, only the "Weighted Average Output" should be used. The "Best Solutions" option is to allow detailed analysis on the success for each solution in the Test, Train and Eval periods. Trying to compare them in the prediction period could be rather hard since each one represents something slightly different. This is one of the most powerful features in ANNI. When training, a solution will train towards the strongest signal first. If someone were to use 1 solution, than they would see the biased output of the strongest signal (with smaller and smaller ones underlying it). The problem of course with stocks is that they have many signals meshed together to form the final output…the closing price. Understanding the simple concept of moving averages we find that we can look at different cycles while reducing the noise of the other signals. Because ANNI can look at several days simultaneously (have varying input periods in other words), we are giving that same power to ANNI. So we can look at the strongest signal for a 3 day period and the strongest signal for a 7 day period and...etc. Then we can combine them, just like the stock market does, to produce a final price (the "Weighted Avg" method). So when you view the "Best Solutions", your looking at all the different "best" signals for their given input period which can vary a little or sometimes a lot depending on the security being analyzed. When viewing all the "Best Solutions" in the large graph, look at the intensity of the green lines. The brightest green line is the solution ANNI feels the most confident about in all of the best solutions. The darkest green line is the solution ANNI feels the least confident about in all of the best solutions. This is important in understanding ANNI's "Weighted Average Output". Weighted meaning the solutions with the highest confidence have more say so than the solutions with the least confidence. So for solutions that disagree a lot and have low confidence...their say so into the final weighted output will be very small. Now you can see why the "Weighted Average Output" works best and should always be used as ANNI's final output. It enforces the best, cushions ones that could be potentially wrong and in doing so creates a more robust system. For example, if only short term traders where buying into a particular stock, the stock could be going up (so one of ANNI's solutions that honed in on this signal would show this). If only long term traders where selling out of this same stock, the stock could be going down (so one of ANNI's solutions shows this as well...making it appear they have mixed opinions - and technically they do). Combining both trader types simultaneously (which is what the market is really doing) causes the stock to remain in some reciprocating middle ground (a stocks true value). To understand these methodologies in more depth, you will need to research digital signal processing, Fourier Transformations, Wavelets and Nyquist Frequencies. This will explain how multiple signals can be extracted and analyzed separately...and later recombined. And where each signal could differ greatly between themselves. Although ANNI does not specifically use Fourier or Wavelet transforms for it's inputs, the principals and techniques are similar in concept. Back to ANNI's FAQ
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ANNI's Frequently Asked Questions

If the best solutions disagree on direction when viewing them in the large graph, does this mean it is not a good system?

The first and foremost reason is usually not enough training. If you haven't completed at least 15 generations (or a few new generations after the data file has been updated), continue to train before further analysis.

Aside from that, having solutions disagree means the Prediction System is doing what it's supposed to. What ANNI is basically doing is picking up on multiple signals rather than one, which can obviously vary. When using ANNI's output though, only the "Weighted Average Output" should be used. The "Best Solutions" option is to allow detailed analysis on the success for each solution in the Test, Train and Eval periods. Trying to compare them in the prediction period could be rather hard since each one represents something slightly different.

This is one of the most powerful features in ANNI. When training, a solution will train towards the strongest signal first. If someone were to use 1 solution, than they would see the biased output of the strongest signal (with smaller and smaller ones underlying it). The problem of course with stocks is that they have many signals meshed together to form the final output…the closing price. Understanding the simple concept of moving averages we find that we can look at different cycles while reducing the noise of the other signals. Because ANNI can look at several days simultaneously (have varying input periods in other words), we are giving that same power to ANNI. So we can look at the strongest signal for a 3 day period and the strongest signal for a 7 day period and...etc. Then we can combine them, just like the stock market does, to produce a final price (the "Weighted Avg" method). So when you view the "Best Solutions", your looking at all the different "best" signals for their given input period which can vary a little or sometimes a lot depending on the security being analyzed.

When viewing all the "Best Solutions" in the large graph, look at the intensity of the green lines. The brightest green line is the solution ANNI feels the most confident about in all of the best solutions. The darkest green line is the solution ANNI feels the least confident about in all of the best solutions. This is important in understanding ANNI's "Weighted Average Output". Weighted meaning the solutions with the highest confidence have more say so than the solutions with the least confidence. So for solutions that disagree a lot and have low confidence...their say so into the final weighted output will be very small. Now you can see why the "Weighted Average Output" works best and should always be used as ANNI's final output. It enforces the best, cushions ones that could be potentially wrong and in doing so creates a more robust system.

For example, if only short term traders where buying into a particular stock, the stock could be going up (so one of ANNI's solutions that honed in on this signal would show this). If only long term traders where selling out of this same stock, the stock could be going down (so one of ANNI's solutions shows this as well...making it appear they have mixed opinions - and technically they do). Combining both trader types simultaneously (which is what the market is really doing) causes the stock to remain in some reciprocating middle ground (a stocks true value).

To understand these methodologies in more depth, you will need to research digital signal processing, Fourier Transformations, Wavelets and Nyquist Frequencies. This will explain how multiple signals can be extracted and analyzed separately...and later recombined. And where each signal could differ greatly between themselves. Although ANNI does not specifically use Fourier or Wavelet transforms for it's inputs, the principals and techniques are similar in concept.

Back to ANNI's FAQ