CONTENTS

• New Video:  NASDAQ 100 Futures:  Gaining 2,770 points over 5 years.  A Good System or Not?

• Dakota Update: New Indicators Added

• Combining BioComp Profit and Dakota

• Value Choice:  Get a Dakota/Profit Bundle at a Reduced Investment until April 30th

VIDEO:  NASDAQ 100 Futures
Following up on the Rydex Velocity 100 fund in the last newsletter, which is based on the NASDAQ 100 index, we applied Dakota to the NASDAQ 100 futures contract using the Double Smoothed Stochastic bot*.  In the video, we achieve a hypothetical 2,770 points over the last 5 years with a fairly nice equity curve.  Not too bad.  Since there is some variation in runs in Dakota (this is a feature), we ran the swarm 30 times and found the average gain to be 2,300 points over 5 years and an average gain of 200 points in the last 12 months.  Still quite good.  That would be about $4,000 hypothetical profit for each $3,750 e-mini investment, essentially doubling your money in a year (in theory).  However, the system, when looked at closely in the last 12 months, experienced a 5% drawdown in total equity for about 90 days.  That is, in the last year the equity dropped by more than 100 points out of 2,100 points of accumulated profits then rose nearly 300 points to finish 200 points ahead.

We posted this video for comment to the Dakota users.  Many reproduced similar systems and experimented with it.  One customer pointed out that we were a bit too harsh on ourselves on slippage and commission assumptions (we had 2%, which worked out to about $70 per round-trip), so the gains may be higher.  Some liked it very much, while others prefer smaller, more consistent gains.

We should remember that Dakota's results are "out-of-sample", paper-traded forward, and not back-fit.  Other tools may show fantastic equity curves and then crash and burn.  Dakota is more likely to be nearer truth and some realities of equity variance should be expected.

Is this a good system?  You decide...  You can watch the video here...
http://www.biocompsystems.com/products/Dakota/videos/index.htm

If you like it, it is fairly easy to reproduce similar systems.

*The Double Smoothed Stochastic bot, created by a Dakota user, is available to all Dakota users from the private Dakota web site.  Customers are actively using it for trading, to their happy success.

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Dakota Update
For Dakota users, version 1.4.70 was posted to the private Dakota web site.  Based on your requests, we added the Weighted Moving Average and Fisher Transform indicators to Dakota's ScriptBot API so you can use them in your Dakota bots.  In the next update, version 1.5.0, Dakota will have a wealth of exportable performance statistics:

Dakota will optionally append these to a file a row at a time should you wish to aggregate multiple runs' data into one file for analysis.

We will also have Jurik's VEL, CFB and RSX implemented and ready for use.

Also, don't miss the Double XMA Smoothed Stochastic bot, a variant of Bob's bot that uses XMA smoothing and the Equity Controller adaptation.  The shift to the slightly faster XMA smoothing helps signal timing when forecasting ahead by 1 bar.

Dakota 1.5.0 is slated for release next week once the documentation updates are completed.  All Dakota users get the upgrade at no charge and is one of a series of upgrades that come every week or two.

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Combining BioComp Profit and Dakota
One thing that Dakota / Profit users quickly learned is the sharing of information between Dakota and Profit.  You can use signals from one application in the other to your benefit.

Using Dakota Signals In BioComp Profit
You can import Dakota's signals and use them as input indicators when you build models.  When you create the swarm in Dakota, be sure to set the trading delay to 1 and turn ON the option to "Project the Signals into the Future".  Run the swarm, export the signal and import it (or them) into Profit as a text file.  After you import the signal into Profit, click on it in the Indicators window and click the "Chart-It" button.  Nice looking equity curve!  Import as many Dakota signals as you like.  Of course, they should pertain, in some way, to the security you are trading.

Using Profit Signals In BioComp Dakota
You can import Profit's signals and use them in your ScriptBots inside Dakota.  In Dakota, after you specify the traded security's data, import the text file containing the signal from Profit.  The Profit signal will be in the Prices() array in your ScriptBots.  To determine which position, count down the rows in the imported data list and add 1.  So, if the Profit signal is in the 5th position, you'll find it in Prices(6) in the script bot.  You add one because the date is inserted into the first position in the Prices() array.

How you use these Profit signals within Dakota is up to you.  You could create all sorts of different logic, like if the momentum is rising and the Profit signal is positive, go long or vis versa, or you could put adaptive decision thresholds around one or more Profit signals, etc.  In Dakota, the possibilities are endless, limited only by your creativity.

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BioComp Profit / Dakota Value
Until April 30th, 2006

We would like to offer you a unique value in the spirit of the above article:

• BioComp Dakota / BioComp Profit 7.0 "Bundle"
  Invest in Dakota Express or Standard and get 15% reduction on BioComp Profit upgrades to 7.0, new or additional licenses.  If you invest in Dakota at the Sponsor level you'll receive a 25% reduction on Profit.

Contact sales@biocompsystems.com to get a quote based on your particular situation.

Or, if you wish to just get started with Dakota...  You can order here:
http://www.biocompsystems.com/store/financial/index.htm

P.S. You may automatically receive a Silver (10%), Gold (15%) or Platinum (25%) Preferred Customer Discount too!  We honor and respect our customers and the value we've shared together over the years.

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Closure
If you find this newsletter interesting, please stay subscribed.  If you think others might like getting it, forward this email to them or post a link to our website in your favorite trading discussion group.  That helps us grow.  We'd appreciate it.  If you have suggestions, please email me at cmcook@biocompsystems.com.

These documents are provided for informational purposes only. The information contained in this document represents the current view of BioComp Systems on the material discussed as of the date of publication.  Materials written should not be interpreted to be a commitment on the part of BioComp and BioComp cannot guarantee the accuracy of any information presented after the date of publication.   INFORMATION PROVIDED IN THIS DOCUMENT IS PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND FREEDOM FROM INFRINGEMENT. Statements of equity performance are hypothetical and have not been substantiated by records of actual trading.  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 that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those mentioned.

The user assumes the entire risk as to the accuracy and the use of this document. This document may be copied and distributed subject to the following conditions: 1) The entire document must be copied without modification; 2) All copies must contain BioComp's copyright notice and any other notices provided therein; and 3) This document may not be distributed for profit.  All trademarks acknowledged.  (C) Copyright BioComp Systems, Inc. 2006.