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We are all Liars

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Honesty may be the best policy, but scheming and dishonesty are part of what makes us human.

I came across this article in National Geographic by Yudhijit Bhattacharjee and it really got me thinking how lying is a central theme to the business I am involved in.

Firstly, our business PsyQuation is a fintech startup identifying and developing trading talent with our robo trading coach programmed to machine-learn from its environment and notify traders of their mistakes, and our matching engine (PsyQuation Score™) for ranking trading talent and matching skill with capital.

There is a saying “fake it until you make it”. Never have I seen this more in action than in a startup hub, with startup entrepreneurs walking around like masters of the universe, trying to convince everyone including themselves that they are working on the next Google or Facebook. I digress …….

The history of humankind is filled with examples of people lying. It turns out we are well equipped to lie. “We lie with ease, in ways big and small, to strangers, co-workers, friends, and loved ones. Our capacity for dishonesty is as fundamental to us as our need to trust others, which ironically makes us terrible at detecting lies (this point comes to life later in the article). Being deceitful is woven into our very fabric, so much so that it would be truthful to say that to lie is human.

“Lying is so easy compared to other ways of gaining power,” notes Sissela Bok, an ethicist at Harvard University who’s one of the most prominent thinkers on the subject. “It’s much easier to lie in order to get somebody’s money or wealth than to hit them over the head or rob a bank.”

Auditing Traders Performance

Analysis

Our PsyQuation analytics is designed to call out the person we typically lie to the most – ourselves. We use a no B.S. filter, meaning we alert you when you are making a trading mistake as defined by our proprietary research alerts tested on a database of 20,000 trading accounts. Even if the alert will upset you.

We also use our PsyQuation Score™to quantitatively analyse whether a trader has skill, money management discipline skill and insights.

Reporting

It still amazes me how many people will invest with a trader who presents with a fancy presentation and a story of fantastic “past performance”. Over and over I see experienced investors fall for the trap of inadequate due diligence, because they want to believe in the fanciful story. I am embarrassed to say I have myself been guilty of this mistake in the past. We all have pressures and allocators are no different, we are under pressure to put money to work. When exciting opportunities are scarce it is tempting to take shortcuts and believe in the lie’s we are from time to time exposed to.

Concluding Remarks

I write this concluding paragraph speaking to myself as much as to anyone else who this resonates with.

People looking to create an advantage for themselves are likely to lie, this applies to traders looking for investors to invest with them. Investors (allocators of capital) who are looking for the rare successful trader to invest with are likely to be deceived if they don’t put some fundamental steps in place to eliminate the deceit.

My advice is to only invest with a manager where you can see the full track-record of a trader with all the trade data obtained from the source, i.e. the broker. For instance PsyQuation automatically connects to the brokers back-end servers and continuously builds its own database of trade and performance history.

Any FX trader who says that they cannot provide you with their full history as they need to guard against someone reverse engineering their system is not someone you want to invest with, I am speaking here of non-institutional traders.

PsyQuation is not the only 3rd party reporting system for traders but we believe our main point of difference with our competitors is the value we place on our quantitative scoring algorithm filter and our experience allocating real dollars on behalf of our clients. We will not promote high flying traders with great return %’s if they are likely to blow up their accounts in the near future, unlike many of the platform cheerleaders who actively market the trader with the highest % return.

Our company motto of making more profits is all about promoting trading behaviour that is likely to result in more sustainable profits. So before you make your next investment be sure that you are not lying to yourself, use a reputable 3rd party filter, and then make sure you have done a proper due diligence on the past trading performance of the trader you wish to invest with.

Warm regards

The PsyQuation Team

 

 

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