Stocks & Commodities V. 24:1 (56-61, 95): Interview: Jeffrey Owen Katz by Jayanthi Gopalakrishnan
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Stocks & Commodities V. 24:1 (56-61, 95): Interview: Jeffrey Owen Katz by Jayanthi Gopalakrishnan
Jeffrey Owen Katz is a professional trader and consultant specializing in predictive modeling and forecasting. He is president and founder of Scientific Consultant Services, a company focused on the development of sophisticated artificial intelligence (neural networks and genetic algorithms) software, primarily for application in the financial markets. He was first to develop a commercial neural network forecasting package for the Standard & Poor’s 500 (NexTurn, released in 1989). He introduced the first 32-bit neural network development tool (N-Train). He was the first to make artificial intelligence technology accessible to TradeStation users through such products as TradeNet and TS-Evolve. He was also the first to publish a paper on genetically evolving rule-based trading systems. He has published a number of articles in a diverse selection of professional journals, trade publications, anthologies, and also coauthored (with Donna L. McCormick) several books. STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Katz via telephone on November 10, 2005.
Q: How did you get interested in the financial markets?
A: Back in the 1970s, I used to dabble in stocks, and at that time, William O’Neil was publishing Daily Charts. I would go over those charts and visually backtest different kinds of systems. I found one pattern where there would be a very low-volume, low-liquidity stock — usually an oil stock — and you’d see a spike in volume and prices would start going up slightly instead of just staying flat. That would be a good breakout-type signal for buying. In those days, breakout systems worked well. I was hooked!
I was only sporadically involved in the markets until about 1986, when the personal computer came along and I got more involved. CompuServe got started about then, and using it you could download actual data, so I started putting together databases and trying to implement in Fortran the same kind of system I used with Daily Charts. By then, though, the breakout system had stopped working as well in stocks. Stock prices moved too suddenly; by the time there was a breakout, it was already too late to get into a profitable trade.
Jeffrey Owen Katz is a professional trader and consultant specializing in predictive modeling and forecasting. He is president and founder of Scientific Consultant Services, a company focused on the development of sophisticated artificial intelligence (neural networks and genetic algorithms) software, primarily for application in the financial markets. He was first to develop a commercial neural network forecasting package for the Standard & Poor’s 500 (NexTurn, released in 1989). He introduced the first 32-bit neural network development tool (N-Train). He was the first to make artificial intelligence technology accessible to TradeStation users through such products as TradeNet and TS-Evolve. He was also the first to publish a paper on genetically evolving rule-based trading systems. He has published a number of articles in a diverse selection of professional journals, trade publications, anthologies, and also coauthored (with Donna L. McCormick) several books. STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Katz via telephone on November 10, 2005.
Q: How did you get interested in the financial markets?
A: Back in the 1970s, I used to dabble in stocks, and at that time, William O’Neil was publishing Daily Charts. I would go over those charts and visually backtest different kinds of systems. I found one pattern where there would be a very low-volume, low-liquidity stock — usually an oil stock — and you’d see a spike in volume and prices would start going up slightly instead of just staying flat. That would be a good breakout-type signal for buying. In those days, breakout systems worked well. I was hooked!
I was only sporadically involved in the markets until about 1986, when the personal computer came along and I got more involved. CompuServe got started about then, and using it you could download actual data, so I started putting together databases and trying to implement in Fortran the same kind of system I used with Daily Charts. By then, though, the breakout system had stopped working as well in stocks. Stock prices moved too suddenly; by the time there was a breakout, it was already too late to get into a profitable trade.
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