We launched in June 2016 and oh boy it’s been one helluva wild ride. Not many people can say they have the best job in the world, but I can. As I sip my whiskey 37,000 feet in the air on my way back home to Australia from a short trip to Thailand, I beg your indulgence, as I share the PsyQuation story to those of you in our community – old and new. [For those of you not into stories you can skip to the announcement below].
In 2016 two bald guys with a 10yr age gap embarked on a new adventure, part of an epic journey that started in 2010. I was a trader managing some ultra high net worth guys money and some of my own. I was looking for some smart quant’s (today they call them data scientists) to help me build and improve some multi-factor models I believed gave me an edge. Mathgears were a triumvirate of 3 math PhD’s run by a Ukrainian guy, Vladimir Krouglov, and they answered my advert on Upwork. From there we never looked back. Vlad and I have built an incredible partnership based on trust and mutual respect.
The idea for PsyQuation came from one simple (actually not so simple) problem we wanted to solve. We wanted to help trader’s become more profitable. We figured that if we could help traders avoid mistakes then we could achieve our goal. All we needed was to somehow get a large enough database of trading accounts to examine, using my strengths from a trading background and a PhD in Behavioral Finance and Vlad’s PhD in mathematics we figured we could solve the problem. It turned out to be incredibly difficult to get enough accounts to do our research on, but we persevered like with everything we have done. Things started slow and then pretty quickly we got to partner with 20 plus of the worlds biggest and best forex brokers. Our business model kept pivoting as we tried to find a business model to sustain us. A year later we entered into a strategic partnership with Axi that allowed us to move forward and build a business that we are confident is not only going to be around for years to come but is a company that is going to make a serious impact on the worlds trading scene; across all asset classes, i.e. fx, equities, futures & options and all API accessible trading platforms.
In July this year, that is next month, we will launch PsyQuation 2.0 a major overhaul of our current system. You will see a similar but a much more user-friendly platform with more alerts and trading tools and you will feel a much more powerful engine under the hood, updating the platform every minute versus the current 15-minute delays. But let me get back to what drives us at PsyQuation and what I am so eager to share with you.
I mentioned that we wanted to help traders make more money but I never elaborated that this includes investors who are looking to invest/copy other successful traders. In 2012 Vlad and I started working on an algorithm that would help identify trading talent. We successfully sold that algorithm and went back to the drawing board. We decided to build a score that came at the problem 180 degrees from the original angle we used to build our first score. You see the results of this now in the PsyQuation Score, an algorithm that looks at a trading account from all angles including A.I. models trained on our super large database of trading accounts. While the development of the PsyQuation Score is a work in progress, we are quite confident that it is the best probabilistic forecaster of the likely profitability of a group of traders than anything else we have seen on the market.
With our proprietary PsyQuation Score™ in place, we were ready to complete the dream of building a two-sided market place for traders and investors that could actually be profitable for investors. But there was something missing, we needed to incubate our own incubator to test how good our score is and to incubate enough trading talent that we believed in for investors to copy.
And that is how one of the remaining pieces of the puzzle – AxiSelect in its current state was launched. In November 2017 we launched AxiSelect a capital allocation incubator and accelerator that was built around a filter (the PsyQuation Score) that makes the decision whether a trader has talent. No human interference, the ultimate meritocracy.
PsyQuation as investment manager of Axi’s AxiSelect program places no value on what university you went to, if you went at all. It places no value on where you worked or what office infrastructure you have. We were and remain interested in one thing. Do you have talent or edge as some like to call it. With this as our filter we designed the program to be progressive (increased capital) in the way we accelerate your journey to becoming a Professional trader (Pro). After 1yr and 6 months we have incubated 83 traders, allocated $1.8 million, paid $100k + in performance fees, returned an aggregated 14% with a Sharpe Ratio of 1 and a PsyQuation Score of 83, despite 32 of the traders incubated being stopped out along the way.
The PsyQuation Score and our approach to managing money is not a holy grail, rather it is a probabilistic approach to making money using our proprietary scoring algorithm as the filter to find talent, and letting the law of large numbers do the magic.
I regard our AxiSelect program as a great success that has taught us so much along the way. From what we have learned in our own program and what we have observed across the broader copy trading and managed account landscape, has fuelled our ambition to tackle this market with a unique approach and to make a serious move on the wealth management space.
We are currently working hard on the investor side of the PsyQuation platform and will soon be making announcements about its launch and how it how it will offer a unique value proposition to what is currently available on the market. As we have not yet set a date for its launch I felt it was vitally important for us to reward our loyal “early adopter” AxiSelect traders who believed in our program and believed in my promises that I will bring more capital for our traders to trade.
I mentioned earlier that I am on my way back from Thailand. Yesterday was the prize giving for a 4.5-month trading competition that ended on Friday the 31st of May. The competition went right down to the wire with the winner jumping from 3rd place on the very last day. Here are the winners with their sizeable cheques of USD 15,000 | 10,000 | 5,000 not bad for a couple of months of trading.
With Thailand being one of PsyQuation’s largest markets with a tremendously enthusiastic community of full-time and part-time traders I officially announced AxiSelect 2.0 I am delighted to share with the rest of you the exciting new program (commencing 1 July) with more capital available, now $5 million with allocations of up to $350,000 guaranteed for our Pro’s. To preview the program you can click on this link.
I want to conclude by thanking the PsyQuation team for their hard work and commitment to excellence. In 3 years we have built a world-class tremendously powerful platform.
With more than 3,000 new traders joining each month PsyQuation is on an important mission and I promise together with my team to do our best to make it even better.