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1992-05-24
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WITHIN30 DOCUMENTATION
Introduction
Welcome, and thanks for trying WITHIN30.
WITHIN30 is a very accurate and easy-to use stock market
forecasting system. The WITHIN30 software is specifically
designed to forecast or predict movements in the Dow
Jones Industrial Average.
This system is for investors or money managers who can
benefit from very accurate forecasts of the DJIA.
WITHIN30 can especially enhance the success of mutual
fund switchers. Investors may use this system as their
sole forecasting tool, or one of many.
WITHIN30 is very simple to use and maintain. The system
uses the DJIA's previous 200 days of closing values to
generate its forecast, so the data must be kept up to
date. Each day, the previous day's DJIA closing value is
appended to the data file (DJIA.DAT), and the current 30-
day forecast is generated. That is all there is to using
this software.
We hope you'll agree that WITHIN30 is the most accurate
stock market forecasting tool available.
WITHIN30 features state of the art time-series
forecasting algorithms, an intuitive graphical user
interface, quick forecast verification, and the best
forecasting track record available.
These features allow better market timing, increased
profit potential, superb portfolio or fund management,
improved mutual fund switch timing, and better overall
investment performance.
If you're an investor who can profit from knowing the
likely direction of the DJIA over the short term, this
package is for you.
1.) INSTALLATION
WITHIN30 should be run from a hard disk drive, because of
the speed of the hard disk when reading large files.
There are two ways to install the software onto your hard
disk. The easiest way is to use the install program
supplied with the original floppy disk.
a:install path<ENTER>
where path is the drive:\subdirectory where you want the
software to reside.
A more specific example of this command might be:
C>a:install c:\market
This command would create a subdirectory on C: called
\market, and would copy the software into that
subdirectory.
Another way to install the software to your hard disk
would be to use the DOS "copy" command to copy all files
from A: to their destination. An example of this might
be:
C>copy a:*.* c:\market
This would copy all required files into a subdirectory
called \market on your C: drive, if that subdirectory
exists.
2.) REQUIRED FILES
There are 7 files shipped with this disk. They are:
WITHIN30.EXE
WITHIN30.DOC
MAPHC30.MAP
MAPH30.PRD
DJIA.DAT
EGAVGA.BGI
INSTALL.BAT
3.) HARDWARE REQUIREMENTS
Before installing WITHIN30, make sure your computer
system meets the following criteria:
o DOS 2.1 or higher
o A 1.2MB 5.25" floppy drive
o VGA or compatible monitor
o a math chip and hard disk are recommended, but
not mandatory.
QUICK START
If you just want to use the program without making a
current forecast, just enter "WITHIN30" at the DOS
prompt.
To start using WITHIN30 to make current forecasts, there
are two things you must do:
o You must update the DJIA.DAT file.
o You must update the prediction file with the
program.
The DJIA.DAT file can be updated with any ASCII text
editor, before the program is run. Read the section on
appending data before using a text editor.
Updating the prediction file is done using the program.
First, run the program by entering "WITHIN30" at the DOS
prompt. The initialization screen will appear as the
system loads. Next, the forecast screen will be
displayed. Now, hit the "u" key to cause WITHIN30 to
regenerate its prediction file.
4.) WHAT WITHIN30 DOES
WITHIN30 is a program specifically designed to forecast
the Dow Jones Industrial Average(DJIA). The user updates
the daily close of the DJIA using the program, or any
text editor(explained below). The program then calculates
the likely or probable percentage change of the DJIA
within the next 30 trading days. This forecast is printed
and graphed on the screen. The program also displays
graphically the actual percentage changes of the index.
This allows the user to quickly evaluate how correct the
forecasts were in the past. This permits the user to
build confidence in the software, and compare the results
to other forecasts or advisers. With this information,
investors or portfolio managers can enhance their
performance in the market.
5.) HOW WITHIN30 WORKS
WITHIN30 makes its forecasts by learning from the past.
It uses the last 200 trading days of the DJIA to make
each forecast, and was trained on over 20 years of DJIA
data. The technology used is a hybrid of Neural Networks
and Fuzzy-Set operations. Neural Nets are used for the
learning phase, to encode pattern information into a
model of market response characteristics. Fuzzy-Set
operators, including the concentration operator, are then
applied to enhance the performance of the system.
Finally, certain matrix transformations are applied to
the model to obtain its final state. Taken together,
these operations produce the finest forecasting system in
existence. This program raises serious doubts about the
long standing efficient market and random-walk theories.
6.) RUNNING THE PROGRAM
After the program has been installed, just enter WITHIN30
at the DOS prompt in the correct subdirectory. The
program will start reading in the files it uses to make
its forecast. It will let you know how far along it is in
reading those files by indicating percent complete on the
start-up screen. This process is much faster if done from
a hard disk.
7.) INITIALIZATION SCREEN
The initialization screen contains some basic information
about the program, including the version number, percent
complete loading, registration information, and the
distributor's name and address. All correspondence should
be forwarded through the distributor indicated on this
screen, and in the documentation.
8.) FORECAST SCREEN
The forecast screen appears automatically after the
software has initialized. There are many pieces of
information on this screen, which will be described
separately. There is a menu bar at the bottom of the
graphics screen. The first choice in the menu bar is
<H>elp. By pressing the "H" key, a help screen will
appear.
9.) HELP SCREEN
The Help screen gives basic information about what kind
of operations the user can perform. The help screen can
be exited at any time by pressing most keys on the
keyboard. If the enter key is used to return to the
forecast screen, no additional operations will be
performed. If another defined key is pressed from the
help menu, that function will be performed. For example,
if the "d" key is pressed from the help menu, the
software will display a screen of basic documentation
information. These defined keys are like "hot" keys,
because they are active at all times (except in the
editor).
10.) HOT-KEYS...SHIFT LEFT
The first "hot" key defined in the help screen is the "L"
key. The purpose of the "L" key is to scan or shift to
the LEFT on the data stream. The effect is to move back
in time on the displayed data. When the forecast screen
first appears, the last data (DJIA CLOSE) in the data
file (DJIA.DAT), is displayed graphically as the furthest
point on the right of the screen. This is true for the
forecast curve (white), and the DJIA index plot itself
(magenta). Notice that each time the "L" key is pressed,
the "Trading Day Counter" is incremented. This number is
displayed at the top of the screen. It indicates to the
user how many trading days the user shifted into the
past, from the last data in the data file. This helps
keep track of your current position. Notice that when an
upper case "L" is pressed, the software moves 30 trading
days into the past. If a lower case "l" is pressed, the
software moves one day at a time to the left, (or into
the past).
11.) HOT-KEYS...SHIFT RIGHT
The next few hot keys defined in the help screen are the
":" and the ";" keys. Notice that these keys are directly
to the right of the "L" key on the keyboard. These keys
perform the same function as the upper and lower case "l"
key, except in the opposite direction. For example,
suppose you had pressed the "L" key several times to
shift left, or back in time to view historical data.
Maybe you were interested in the crash of '87, and wanted
to view the forecast during that period. If you shifted
too far, you could step forward, or towards the present
by pressing the ":" or ";" keys. The semi-colon steps one
day at a time to the right, and the colon steps 30
trading days at a time to the right. Note that if the
forecast screen had just appeared after initialization,
the colon and semi-colon keys will have no effect,
because you are already shifted fully to the right, (ie.
the most current data is at the far right of the screen).
12.) HOT-KEYS...RETURN "HOME"
Another useful hot-key related to moving back and forward
in time is the "t" key. When the "t" key is pressed
anywhere in the program, you are returned to the original
screen with the most recent data at the far right of the
screen. (If the data file is current, you are brought
back to today.)
13.) TRAINING/VIRGIN DATA
You will notice when scanning back and forth in the data,
that the white forecast plot changes to yellow. Yellow
indicates that the forecast was made on "training" data,
or data that the system had previously seen. The white
color indicates forecasts on data which the system has
never seen before. Training data is used by the system to
learn how to make a forecast. Training and testing data
are used for cross-verification. It allows the
determination of apparent and real accuracies.
14.) APPENDING THE DJIA.DAT FILE
You must use an ASCII text editor to keep the closing
values of the file called "DJIA.DAT" current. The index
values are saved as ASCII text. This file can be viewed
with the DOS "type" command. This file can be updated
daily, or only when you use the program.
15.) DATA STRUCTURE AND MAINTENANCE
The file, called DJIA.DAT is in ASCII format. Make sure
your editor saves this file in ASCII mode. See your
editor's documentation for an explanation of this if not
clear. The file is a stream of numbers, each line
containing a daily closing value the Dow Jones Industrial
Average. The last entry in the file is the most current
value. Each value is separated by a CR/LF combination.
The file is in standard DOS format.
16.) ACCURACY
The forecast screen also shows the accuracy(percent of
correct forecasts over the last 400 "virgin" days). This
number is usually above 80%, indicating its accuracy
rate. Correct forecasts are defined as those that are
inside of the actual performance bounds. Each day, as new
data is added to the end of the DJIA stream, another
point is used in the calculation over the last 400 days.
That is why this value can float slightly. The amount of
float should stay within 5%, based on statistical theory.
The confidence limits for these value was chosen to be
95%.
17.) DATA SOURCES
There are many sources for obtaining the DJIA daily
close, including radio, T.V., newspapers, telephone, on-
line services, etc. When you order your copy of the
program, it is recommended that you start recording the
DJIA daily close, so that when the software arrives,
you'll be able to append this information and begin using
the program immediately on a real time basis. All
software is shipped with an up-to-date DJIA.DAT file.
18.) HOT-KEY...UPDATING ALL FORECASTS
If you notice that you made a mistake entering a closing
value some time in the past, and you want to fix it, you
must use a text editor to edit the file: DJIA.DAT. After
you have edited the file, and run the program WITHIN30,
the first thing you must do is select the "U" hot-key.
This updates all forecasts, not just the most recently
added. This would fix the forecast for the data point
that was originally mis-keyed. Forecasts are written to a
sequential text file called: MAPH30.PRD You can view this
file at the operating system by DOS "typing" it. The last
value in the file is the most recent forecast,
corresponding to the latest close in the DJIA.DAT file.
The two files are parallel matched data streams. As the
system is updating, the percent completed will be
displayed on the screen.
19.) EXIT to DOS
To exit out to the operating system, use the "X" key.
20.) CURRENT FORECASTS
Returning to an explanation of the information available
on the forecast screen, the top left corner shows
"Forecast= ". This is the "current" forecast.
"Current" means the day that is to the furthest right of
the data plotted on the screen. When the forecast screen
first appears, the "current" day is the day corresponding
to the last close entered in the DJIA.DAT file. Because
this software allows the user to scan back and forth on
the data stream, the current day changes. You can keep
track of where in the file you are by viewing the screen
for the number of trading days into the past as described
above.
21.) GRIDS
The forecast screen has a grid which is used for scaling
the graphics presented. The vertical lines are exactly 10
trading days apart. (Note that there are usually 5
trading days in a week, and 20 trading days in a month).
The vertical lines extend down the screen and into the
magenta plot of the DJIA close curve. These vertical
lines can be used to line up forecasts with market
movements visually. The horizontal lines represent
percentage change. The distance between two horizontal
lines represents 1 percent. The forecasted percent change
and the actual maximum percentage change of the index
within 30 trading days are plotted on this grid.
22.) LEGENDS
A legend is drawn on the forecast screen in the upper
right corner area. It shows at a glance what the
different color plots represent. The DJIA index itself is
plotted in magenta, the forecast is plotted in white or
yellow, and the actual maximum market movement within 30
trading days is plotted in blue.
23.) PERFORMANCE BANDS
Performance bands, which are plotted in blue on the
forecast screen, are used to gauge the accuracy and
utility of the forecast. The two performance bands, one
above, and one below the forecast, show how much the
market actually appreciated and/or depreciated over the
next 30 trading days in percent . For example, say the
market is at 3000 today. Say also that it falls to 2700
in five days, then rises to 3300 in 30 trading days. The
maximum percent appreciation would be 10%, and the
maximum percent depreciation would be -10%. These two
values would then be plotted as points on the upper and
lower blue performance bands. The lines, in effect bound
the market movement over the time period defined->30
trading days. Note that these blue lines stop at 30
trading days from the last data in the data file. This is
because the software needs to have the next 30 closing
values in order to calculate the actual maximum positive
and negative changes.
24.) CORRECT FORECASTS
Any forecast which is between these two performance bands
is correct. If a forecast is made which is outside the
performance bands, it was an incorrect forecast. For
example, a forecast is made for today which is plus 2%.
If the maximum appreciation and maximum depreciation over
the next 30 trading days are +2.5% and -1.7%
respectively, that forecast would have been correct,
because 2% is within 2.5% and -1.7%. So correct forecasts
are always inside the two performance bands, and useful
forecasts are correct forecasts with large magnitudes. A
very volatile forecast line which is frequently inside
the actual performance bands is a very useful tool.
25.) MONEY MANAGEMENT CONSIDERATIONS
In practice, our forecast line sometimes goes outside the
actual performance bands. During these time periods, the
forecast is incorrect. No one will ever predict the
market correctly all of the time, there are only levels
of performance. But just as a good quarter- back does not
have to complete 100% of his passes to win the game, an
investor doesn't have to be right all of the time to make
a lot of money. You have to assess the accuracy of this
forecast(or any other forecast, tool, advisor,
newsletter, broker) by studying how accurate and useful
it has been in the past. Standard statistical techniques,
including sample size and confidence limits should be
used in any assessment. Our accuracy is better than 80%
with 95% confidence limits, based on 400 test samples.
This dictates that no more than 60% of available capital
should ever be invested at once using this software, (and
much less using any other system that we are aware of).
There are several things to consider when attempting to
capitalize on these forecasts. The most important is
money management. Because the forecast is not always
correct, an investor should NEVER put all of his money on
any single trade. Unpredictable events, like wars, etc.,
can cause large market movements which, if you are over
invested, can be financially devastating.
26.) FORECAST INTERPRETATION
An important concept when interpreting the forecast is
that a small forecast value does not mean that the market
won't make a large move. Remember that the forecast can
only be interpreted in the following way:
An x percent forecast means the DJIA is very likely to
change at least x percent from its current value sometime
within the next 30 trading days.
27.) OTHER TERMS
Shorter term forecasts are available, such as WITHIN20
and WITHIN10 and are useful to investors/traders who need
a shorter term indication of likely market movements.
These can be ordered from the distributor. These shorter
term forecast can be extremely valuable to options
traders, or aggressive short term investors. These
programs forecast with a future horizon of 20 and 10
trading days respectively. They are available by order
for $19.00 each.
28.) SOME USES
A good way to use this software is in switching no-load
mutual funds. The strategy is to switch into an index or
equity fund on strong positive forecasts. Hold the
position until the market moves the forecasted percent,
(or 30 trading days, whichever comes first), then switch
out of the market and into a money market fund to limit
your exposure.
Another way to capitalize is with stock options on stocks
with positive beta's, since they tend to follow the
market. Your broker can help you with this if you are not
clear on stock options.
A good way to think about the forecast line is as a
"rate". The magnitude of the forecast indicates the rate
that positions should be bought or sold. For example, a
large positive forecast suggests buying stocks or the
index at a faster pace(larger amounts). A large negative
forecast suggests selling any open positions(or even
short selling).
There are many other uses and investment vehicles. These
are all reviewed in commonly available books, etc. The
challenge is a good forecast, not in how to capitalize on
the information. If you know anything about the future of
the market, there is usually a way to capitalize on that
information.
We hope you find this program both enjoyable and
profitable.
Please address all correspondence and/or orders to:
DISTRIBUTOR: Heritage Supply
P.O. Box 8338
Virginia Beach, Va. 23455
RELATED PRODUCTS:
WITHIN30.....30 day forecaster...........$19.00
WITHIN20.....20 day forecaster...........$19.00
WITHIN10.....10 day forecaster...........$19.00
current DJIA.DAT file....................$19.00
PAYMENT: C.O.D., checks(allow 15 days to clear), money
orders, or P.O.'s. Prices subject to change
without notice.
MEDIA: All products are shipped on 5.25" 1.2Mb floppy
disks.
POSTAGE AND HANDLING: Included in list price.
RETURNS: 24-hour turn-around on defective products. 30-
day 100% satisfaction guaranteed.
Edited & Reformated JL/ETS
