HOW OPTIMIZERS ARE USED

Optimizers are wonderful tools that can be used in a myriad of ways. They help shape the aircraft we fly, design the cars we drive, and even select delivery routes for our mail.
Traders sometimes use optimizers to discover rule combinations that trade profitably. In Part II, we will demonstrate how a genetic optimizer can evolve profitable rule-based entry models. More commonly, traders call upon optimizers to determine the most appropriate values for system parameters; almost any kind
of optimizer, except perhaps an analytic optimizer, may be employed for this purpose.
Various kinds of optimizers, including powerful genetic algorithms, are
effective for training or evolving neural or fuzzy logic networks. Asset allocation problems yield to appropriate optimization strategies. Sometimes it seems as if the only limit on how optimizers may be employed is the user’s imagination, and therein lies a danger: It is easy to be seduced into “optimizer abuse” by the great and alluring power of this tool.
The correct and incorrect applications of optimizers are discussed later in this chapter.