trading systems development

Trading Systems

We developed proprietary trading systems based on an ISING Spin Model, a model used by Physicists to describe magnets. The key feature is the ability to point out imitative relations and to exploit them in profitable trades.

So, what is an ISING Spin Model and how is it related to financial markets?

Basically, an ISING model describes the behavior of magnets. The characteristic that we use to describe financial markets is the imitative behavior between agents: when trading financial assets, people are influenced by their "first neighbors".

To better understand this analogy, we setup a simulation. In the left, we represent the ISING Spin Model, supposing that each pixel is an investor colored in Blue when selling one unit, in white when buying a unit. In the right, you can see the simulated price, where the final price is just the difference between the buy units and the sell units.

The local imitative behavior of each agent leads globally to a so called "phase transition", a sudden price jump where most of the investors polarize to a buy or to a sell state. Our goal is to pick out such condition and take advantage of the resulting price movements, as you can see in the example below.

At present, the system is trading EURUSD under a two tiers software, the execution tier being Tradestation MT5 or MT4. It is working since 2014 and operates in the market completely unattended, thanks to a robust IT infrastructure and a custom software able to recognize and autonomously correct dozen of errors and issues related to the market, the broker, the platform and so on.

Is it profitable? The answer is yes, and we are convinced that it will continue to be until the imitative behavior of the traders persists.

If you are an asset manager, a portfolio manager, an institution or a financial advisor, contact us for more, we will revert back to you soon! Please note that we do not serve natural persons.


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