striker report November, 2017 
   
striker report coffee
Developer/CTA Interview
David T. Register
Founder, ExitPoints.Com
Program(s) Developed: Exit Points Starter
Interview Date: July, 2014
Interviewed by John F. Gallwas, Founder of Striker Securities, Inc.
David Register and his son, Thomas, founded ExitPoints.com in 2003 to develop futures trading systems using artificial intelligence. Artificial intelligence is the human-like intelligence exhibited by machines or software. David Register's experience started at Lockheed, where he was a member of NASA's famed Artificial Intelligence Team. He then served as director of Intelligence Systems at Prechter's Elliot Wave International. From this computer and financial markets research background David developed the algorithms for the "STARTER", "EPIC", and "SCORE" futures trading systems. David Register is a CTA (NFA 300426) and the ExitPoints office is located in Bertram, a small town some 40 miles NW of Austin, Texas.
John F. Gallwas: How do you define "Artificial Intelligence" as it is currently being used in the financial markets?

David Register: To me, artificial intelligence means software that can adapt and change its decision-making based on the data that it is processing. This is in contrast to algorithmic and formulaic approaches that always process the incoming data in the same manner. Some of the major ways to implement artificial intelligence are with genetic algorithms, neural networks, machine vision, and expert systems. In my work, I use my training in expert systems and advanced machine classification techniques to develop trading systems.

John Gallwas: As "Artificial Intelligence" is the backbone of your current trading systems, tell us your background and how it led you to become a system developer?

David Register: My training and experience in statistics, artificial intelligence, and technical analysis of the financial markets has uniquely prepared me for trading systems development. I obtained a Bachelors Degree in Physics in 1969 and a Masters in Statistics in 1974 before starting work as a statistician with a NASA contractor, Lockheed Engineering and Management Services Company.

I first started trading futures in 1978 and learned a number of strategies that did not work in the markets. In 1985, I started my work with artificial intelligence and Expert Systems. (An Expert System is a software program that mimics the decision making of an expert or a group of experts.) In 1991, I left Lockheed to work full-time for Robert Prechterís financial advisory company, Elliott Wave International (EWI). While there, I added features, upgrades and improvements to the software that automates the Elliott Wave Principle.

In 1999, I left EWI for a few years to research and develop a variety of successful indicators and strategies specifically related to futures trading. These tools and methods helped to form the basis of our artificially intelligent, mechanical expert trading system, ExitPoints.

John Gallwas: How do your "Epic", "Score", and "Starter" trading systems differ?

David Register: All three day trading systems are more similar than different. For each system, entry orders are placed each evening to take advantage of overnight price moves. All trades are exited at the end of the session so no positions are held over. This means smaller day trading margins apply. All entries are based on volatility breakouts.

The SCORE and STARTER differ only in the number of markets traded. The SCORE system trades twenty of the more popular futures markets. The twenty are from seven different market sectors and offer considerable diversification. The STARTER system trades eleven of the same twenty markets that SCORE trades. Other than the fewer number of markets traded, STARTER orders are identical to SCORE.

The EPIC system trades fewer markets, different indicators and uses a smaller volatility measure for determining breakouts and entries. This results in the EPIC system trading much more frequently than STARTER or SCORE.

It trades eight highly liquid futures markets. Each market was selected because it typically trades more than 100,000 contracts per day.

John Gallwas: I understand you have developed a new and different approach to back testing your systems. How does it differ?

David Register: In developing a forecasting or trading system, the traditional approach is to "train" a model by optimizing a set of parameters to best fit the model to the price data. This "In-Sample" data set will naturally have an artificially high performance that cannot be used to estimate future market performance since results will be better than can be expected.

At ExitPoints, we do not approach model development in this manner. Instead of optimizing a set of parameters for a model, we use a trade memory approach. From a training data set we build a database (warehouse) of trades. Simulations on this training data set would also appear better than expected for future years, except we simulate "Out-of Sample" forward testing by programming the simulation to temporarily "forget" any future trades for the markets.

Using this technique, ExitPoints can simulate Out-of-Sample forward testing on large datasets of dozens of futures markets over decades of data and provide a more realistic expectation of future trading system performance than traditional approaches.

John Gallwas: Do you personally trade your trading systems?

David Register: We always trade our systems before and after we release them to the public. At the moment, I am only trading one of our unreleased products, but, collectively, the principals at ExitPoints are trading all of our systems.

John Gallwas: Do your systems require updating and if so is it scheduled or event driven?

David Register: No external updates are ever performed on our system. It is self-learning.

John Gallwas: Is there anything in "what's new" you can share with us now?

David Register: Most of our efforts are focused on plans for a swing and position system at some point in the future.

This interview is for informational purposes only and is not intended to be a solicitation of any kind. Trade only with risk capital. The risk of trading can be substantial and each investor and/or trader must consider whether trading systems are a suitable investment.
In This Issue:
Featured Interview(s):
Michael Grech »
Quantopolis Investment Technologies, Owner
From Previous Issues:
 
 Resource Links 
Published at
Striker Securities, Inc.
940 N. Industrial Drive
Elmhurst, IL 60126, U.S.A.
(800)669-8838
(312)987-0043
www.Striker.com
Contact Striker

Copyright © Striker Securities, Inc. All rights reserved.
There is a risk of loss in trading. It is the nature of commodity and securities trading that where there is the opportunity for profit, there is also the risk of loss. Commodity trading involves a certain degree of risk, and may not be suitable for all investors. Derivative transactions, including futures, are complex and carry the risk of substantial losses. Past performance is not necessarily indicative of future results. Please read additional risk matters on our web site, www.striker.com. It is important you understand all the risks involved with trading, and you should only trade with risk capital. This communication is intended for the sole use of the intended recipient.

About this report The information and links on this website are for informational purposes. The risk of trading can be substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Striker is a member of the National Futures Association ("NFA"), the Managed Funds Association ("MFA"), and the National Introducing Broker Association ("NIBA"). Striker is registered with the Commodity Futures Trading Commission ("CFTC"), and was formerly registered with the Securities Exchange Commission ("SEC"). Additionally, Striker is a former member of the Financial Industry Regulatory Authority ("FINRA"), and the Securities Investor Protection Corporation ("SIPC"). FINRA is the largest non-governmental regulator for all securities business in the United States. Please read Striker Disclosure Statement for the additional disclosure.

The trading performance cited throughout our web site is based on actual trading history, unless otherwise noted. The starting account balance is based on the system developer recommendation. Striker tracks actual performance by recording and maintaining each trade ticket for each system generated. The performance information assumes that no additions or withdrawals have been made. The rate of return for all systems disclosed in the Striker Report is cumulative from the day the system actually started trading at Striker. We maintain a "life" track for all 3rd party systems. We do not necessarily base our records on any particular client account. No one particular customer has achieved these results. The percentage returns reflect inclusion of commissions and fees.The actual percentage gains/losses experienced by investors will vary depending on many factors, including, but not limited to: starting account balances, market behavior, the duration and extent of investor participation (whether or not a client takes all signals for a system) in the specified system and money management techniques.

Striker is a revolutionary concept in action: an international, professional team of brokers dedicated to trading only for clients. It bears repeating: unlike most other brokers, Striker does NOT trade futures for itself or any of its employees. This policy has been in place from the start in order to guarantee that our entire focus remains on the interests of our clientele. Striker believes that when brokers are allowed to trade for themselves (or have in-house trading practices) there is a strong potential for conflict of interest, as the broker may place more importance on his own trading activities (or that of his firm's) than on those of his clients. Finally, Striker has no financial ties to system developers, so there no bias or pressure on how we report the actual trading results posted in our client section. This section is designed specifically for Striker's clients, so they may audit their results on a daily, weekly, monthly, or annual basis.