I am trying to make it into the AxiSelect incubation program. You can follow my journey in real time here:
Trading professionally is like being a high performance athlete, this is not gambling if you have an edge. If you thrive on the challenge of beating others and yourself and you are a responsible dedicated person looking for ways to improve, trading is addictive for all the right reasons.
Mike’s Freestyle Account:
Performance from Inception +17.84%,
Performance for the week + 2.50%
PsyQuation Score 53
Sharpe Ratio 12.74
Everything is tracking well except for my PsyQuation Score, we will need to do a deep dive in future letters.
I still need to share some of the podcasts I recorded, I think (hope) you will enjoy. Final bit of housekeeping, I think we are about 10 days away from launching our Alpha Copy Trading program.
PsyQuation Community Stats
We look at the average duration of trades compared to January as a (baseline). The numbers below are %’s and reflect that the length of trades have roughly halved in time since January. I think this can largely be explained by the volatility in the market but can also be reflective of the increase in day trading.
Unless you have been living under a rock for the last few weeks you will have read about the day trading revolution unfolding with personalities like Dave Portnoy and his army of 1.6m followers and platforms like Robinhood.
Here are some interesting stats relating to retail trading that you may find interesting.
In 1Q20, weekly hours spent in the top-ten stock-market monitoring and trading apps surged 82%, according to CNBC. Online trading platform Robinhood has reported a 30% increase in members (10 million to 13 million), and a 600% surge in usership. Comparing 1Q19 to 1Q20, Charles Schwab saw an increase in new accounts of 58%. For TD Ameritrade, that number was 149%. And for ETrade, it was 169%.
The trade that has most-defined the risk appetite of euphoric retail investors has been “the bankruptcy trade”.
Do Machines Have Feelings?
On Friday night we went for dinner as a family to a teacher of philosophy. The teacher had an incredible way of engaging the dinner table with people ranging from age 6 to 76 in Socratic questioning. An open minded approach for gaining a deeper understanding by exposing oneself to all sides of an argument.
I am going to leave the question the teacher on Friday night posed and propose my own question – Do Machines Have Feelings?
About a month ago I started watching the HBO sci-fi series Westworld. I have been very intrigued by the weird plot and its many layers of complexity. In short a small region is populated with human like androids and wealthy guests are free to behave in any way they wish.
It is pretty sick, with many of the guests raping, torturing and murdering the android (hosts). The level of depravity you see in human behaviour is quite shocking, the level of shock is greatly increased due to the fact that the “hosts” are indistinguishable from humans.
Now here is where things start to get interesting. The creator of the androids has created in some of the hosts, a coding back door to a level of sentience. It starts with a tiny amount of memory. Each time the host gets killed and they go back to the laboratory for rebuilding and memory rebooting they notice after 100’s or 1000’s of times of repeating the process that some of them are able, with difficulty, to recall previous lives and piece it all together to understand what their lives are about and who has hurt them and with the memory comes emotions.
In Westworld machines have feelings.
I have to tell you if you apply a Socratic questioning philosophy to my question you will never be the same person again. Think of how violently you sometimes behave in computer games. Often for the sake of it you will just shoot and kill a character. Think of the number of times you walk past a fluffy toy and you kick it or jump on it. Can you imagine if after all, these in-animate objects had feelings.
You may be wondering what any of this has to do with trading the markets. I have long held the view that financial market time series have “memory” and I have spent the last 12 yrs struggling to prove it. This question plagues the finest data scientists in quantitative finance. This post I found quite interesting but way above my pay grade.
In conclusion, the markets comprise the collective emotions and beliefs of all its constituents. We as a rule think of the markets as inanimate objects without feelings. I am proposing that markets do in fact have memory and with memory comes feelings.