Email of the day 1
Comment of the Day

May 23 2017

Commentary by David Fuller

Email of the day 1

On Quants:

I thought about your move to London and starting CAL nearly 50 (!) years I read this article from Varchev Financial Services about Quants. In my mind Chart was a forerunner to the latest craze, and, again, the computer has transformed yet another industry

David Fuller's view

Well remembered! Chart Analysis Limited helped to popularise the use of price charts, if only to see what was actually going on in markets, and to also make behavioural assumptions based on the price action. We received plenty of leg pulling 50 years ago but the efficiency and weight of money logic behind price trends soon made Technical Analysis indispensable for traders.

However, it is certainly a quantum leap (pun intended) to compare Behavioural Technical Analysis (BTA) to Quants.  They have little in common. BTA monitors crowd action.  Some Quants try to manipulate crowd action, which they can do with sufficient funds in leveraged markets. 

This makes leveraged trading more dangerous for everyone else. Within a decade or two, I think artificial intelligence will wipe out Quants, because it will know so much more about market action than the teenage Russian-born software engineer mentioned by Varchev. 

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