Quantifying human behaviour into trading algo
We quantify trends, correlations, diversification, indicators, fundamentals, yet all that is caused by human psychology; do you know a way to derive probability directly from humans?
If you monitor enough sample size (maybe 1000+) of traders with similar degree of experience, in their behaviour there are patterns that drive price, like position accumulations at certain levels, placement of stops and much more… Market Makers know it best!
However…Every human is different. Moreover, their psycho is changing again and again. In addition, the changes dependent on each others’ behavior, so the function may be X=G(Y) Y=F(X). Inter affected!
But it is very interesting to try to figure out what others are thinking about. Maybe we can start from the basic game theory.
NOTE I now post my TRADING ALERTS into my personal FACEBOOK ACCOUNT and TWITTER. Don't worry as I don't post stupid cat videos or what I eat!