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1  Alternate cryptocurrencies / Announcements (Altcoins) / Read New Blog Post by Dr. Ernest Chan on: July 14, 2018, 11:18:12 AM
Loss aversion is not a behavioral bias
In his famous book "Thinking, Fast and Slow", the Nobel laureate Daniel Kahneman described one common example of a behavioral finance bias:

"You are offered a gamble on the toss of a [fair] coin.
If the coin shows tails, you lose $100.
If the coin shows heads, you win $110.
Is this gamble attractive? Would you accept it?"

(I have modified the numbers to be more realistic in a financial market setting, but otherwise it is a direct quote.)

Experiments show that most people would not accept this gamble, even though the expected gain is $5. This is the so-called "loss aversion" behavioral bias, and is considered irrational. Kahneman went on to write that "professional risk takers" (read "traders") are more willing to act rationally and accept this gamble.

It turns out that the loss averse "layman" is the one acting rationally here.

It is true that if we have infinite capital, and can play infinitely many rounds of this game simultaneously, we should expect $5 gain per round. But trading isn't like that. We are dealt one coin at a time, and if we suffer a string of losses, our capital will be depleted and we will be in debtor prison if we keep playing. The proper way to evaluate whether this game is attractive is to evaluate the expected compound rate of growth of our capital.

Let's say we are starting with a capital of $1,000. The expected return of playing this game once is initially 0.005. The standard deviation of the return is 0.105. To simplify matters, let's say we are allowed to adjust the payoff of each round so we have the same expected return and standard deviation of return each round. For e.g. if at some point we earned so much that we doubled our capital to $2,000, we are allowed to win $220 or lose $200 per round. What is the expected growth rate of our capital? According to standard stochastic calculus, in the continuous approximation it is -0.0005125 per round - we are losing, not gaining! The layman is right to refuse this gamble.

Loss aversion, in the context of a risky game played repeatedly, is rational, and not a behavioral bias. Our primitive, primate instinct grasped a truth that behavioral economists cannot. It only seems like a behavioral bias if we take an "ensemble view" (i.e. allowed infinite capital to play many rounds of this game simultaneously), instead of a "time series view" (i.e. allowed only finite capital to play many rounds of this game in sequence, provided we don't go broke at some point). The time series view is the one relevant to all traders. In other words, take time average, not ensemble average, when evaluating real-world risks.

The important difference between ensemble average and time average has been raised in this paper by Ole Peters and Murray Gell-Mann (another Nobel laureate like Kahneman.) It deserves to be much more widely read in the behavioral economics community. But beyond academic interest, there is a practical importance in emphasizing that loss aversion is rational. As traders, we should not only focus on average returns: risks can depress compound returns severely.

Original source:
Read the original article on Dr. Ernest Chan’s blog here
2  Alternate cryptocurrencies / Tokens (Altcoins) / Re: [ANN] QUANTOR - Quantitative investments in decentralized economy on: July 14, 2018, 11:17:20 AM
Loss aversion is not a behavioral bias
In his famous book "Thinking, Fast and Slow", the Nobel laureate Daniel Kahneman described one common example of a behavioral finance bias:

"You are offered a gamble on the toss of a [fair] coin.
If the coin shows tails, you lose $100.
If the coin shows heads, you win $110.
Is this gamble attractive? Would you accept it?"

(I have modified the numbers to be more realistic in a financial market setting, but otherwise it is a direct quote.)

Experiments show that most people would not accept this gamble, even though the expected gain is $5. This is the so-called "loss aversion" behavioral bias, and is considered irrational. Kahneman went on to write that "professional risk takers" (read "traders") are more willing to act rationally and accept this gamble.

It turns out that the loss averse "layman" is the one acting rationally here.

It is true that if we have infinite capital, and can play infinitely many rounds of this game simultaneously, we should expect $5 gain per round. But trading isn't like that. We are dealt one coin at a time, and if we suffer a string of losses, our capital will be depleted and we will be in debtor prison if we keep playing. The proper way to evaluate whether this game is attractive is to evaluate the expected compound rate of growth of our capital.

Let's say we are starting with a capital of $1,000. The expected return of playing this game once is initially 0.005. The standard deviation of the return is 0.105. To simplify matters, let's say we are allowed to adjust the payoff of each round so we have the same expected return and standard deviation of return each round. For e.g. if at some point we earned so much that we doubled our capital to $2,000, we are allowed to win $220 or lose $200 per round. What is the expected growth rate of our capital? According to standard stochastic calculus, in the continuous approximation it is -0.0005125 per round - we are losing, not gaining! The layman is right to refuse this gamble.

Loss aversion, in the context of a risky game played repeatedly, is rational, and not a behavioral bias. Our primitive, primate instinct grasped a truth that behavioral economists cannot. It only seems like a behavioral bias if we take an "ensemble view" (i.e. allowed infinite capital to play many rounds of this game simultaneously), instead of a "time series view" (i.e. allowed only finite capital to play many rounds of this game in sequence, provided we don't go broke at some point). The time series view is the one relevant to all traders. In other words, take time average, not ensemble average, when evaluating real-world risks.

The important difference between ensemble average and time average has been raised in this paper by Ole Peters and Murray Gell-Mann (another Nobel laureate like Kahneman.) It deserves to be much more widely read in the behavioral economics community. But beyond academic interest, there is a practical importance in emphasizing that loss aversion is rational. As traders, we should not only focus on average returns: risks can depress compound returns severely.


Original source:
Read the original article on Dr. Ernest Chan’s blog here
3  Alternate cryptocurrencies / Tokens (Altcoins) / Re: [ANN] QUANTOR - Quantitative investments in decentralized economy on: July 09, 2018, 07:30:16 AM
Dr. Ernest P. Chan
Dr. Ernest P. Chan is the Managing Member of QTS Capital Management, LLC. His career since 1994 has been focusing on the development of statistical models and advanced computer algorithms to find patterns and trends in large quantities of data. He has applied his expertise in statistical pattern recognition to projects ranging from textual retrieval at IBM Research, mining customer relationship data at Morgan Stanley, and statistical arbitrage trading strategy research at Credit Suisse, Mapleridge Capital Management, and other hedge funds.

While at the Human Language Technologies group at IBM T. J. Watson Research Center (Yorktown Heights, NY), Dr. Chan spearheaded IBM’s research effort to develop a system for searching large text databases such as the World Wide Web, catapulting IBM’s reputation as a top player in the field. His system was placed seventh among some forty competitors in a competition sponsored by the National Institute of Science and Technology and the Department of Defense in 1996. At the Data Mining group in Morgan Stanley’s headquarter in New York, Ernie pioneered the application of some of these sophisticated statistical algorithms to the complex task of extracting customer relationships in the Morgan Stanley customer accounts database.

Ernie was invited to join a proprietary trading group at Credit Suisse in New York in 1998 to develop statistical models for equities and futures trading. He later joined Mapleridge Capital Management Corp. in 2002 as a Senior Quantitative Analyst working on futures trading strategies, and then Maple Financial in 2003 as a senior researcher and trader.

Ernie writes the Quantitative Trading blog and was quoted by the New York Times, Forbes, and the CIO magazine, and interviewed on CNBC’s Closing Bell program, Technical Analysis of Stocks and Commodities magazine, Securities Industry News, Automated Trader magazine, and the CFA Institute Magazine on topics related to quantitative trading. In recognition of his expertise in statistical data mining, he was invited to serve on the Program Committees of the International Conference of Knowledge Discovery and Data Mining in 1998. He was an invited speaker at the Automated Trading conference in London, UK, in October 2009, the Market Technicians Association Toronto Annual Conference in 2010, the Quant Invest Canada conference in 2012, and QuantCon in New York in 2015-17. He is the author of “Quantitative Trading: How to Build Your Own Algorithmic Trading Business” and “Algorithmic Trading: Winning Strategies and Their Rationale“, both published by John Wiley & Sons. His new book “Machine Trading: Deploying Computer Algorithms to Conquer the Markets” was published in 2017. Ernie conducts workshops on Statistical Arbitrage, Quantitative Momentum Strategies, and Artificial Intelligence for Traders in London. He was an Adjunct Associate Professor of Finance at Nanyang Technological University in Singapore, and an Industry Fellow of the NTU-SGX Centre for Financial Education, which is jointly set up by NTU and the Singapore Exchange. He also teaches Risk Analytics at Northwestern University’s Master of Science in Predictive Analytics program and supervises student theses there.

Ernie holds a Bachelor of Science degree from University of Toronto in 1988, a Master of Science (1991) and a Doctor of Philosophy (1994) degree in theoretical physics from Cornell University.

4  Alternate cryptocurrencies / Announcements (Altcoins) / More Universities start to teach people Crypto now! on: July 08, 2018, 11:22:32 AM
Five Universities Offer Crypto Courses in Spain, Argentina, and Venezuela
Among major topics of studies are Bitcoin, Ethereum, cryptocurrencies, blockchains, initial coin offerings ICOs, smart contracts, DAOs, and crypto-economics.
https://news.bitcoin.com/universities-crypto-courses-spain-argentina-venezuela/
5  Alternate cryptocurrencies / Tokens (Altcoins) / Re: [ANN] QUANTOR - Quantitative investments in decentralized economy on: July 08, 2018, 11:22:01 AM
Five Universities Offer Crypto Courses in Spain, Argentina, and Venezuela
Among major topics of studies are Bitcoin, Ethereum, cryptocurrencies, blockchains, initial coin offerings ICOs, smart contracts, DAOs, and crypto-economics.
https://news.bitcoin.com/universities-crypto-courses-spain-argentina-venezuela/
6  Alternate cryptocurrencies / Tokens (Altcoins) / Re: [ANN] QUANTOR - Quantitative investments in decentralized economy on: June 23, 2018, 03:13:12 PM
US federal reserve finally has acknowledged the importance and the weight of cryptocurrencies in the investment world!
This week the Federal Reserve Bank of St. Louis added cryptocurrency to their Federal Reserve Economic Data (FRED) database. It’s a seemingly small gesture, but one that signals to most observers crypto’s maturation, at least in the eyes of arguably the most important central banking institution in the world.
https://news.bitcoin.com/us-federal-reserve-launches-cryptocurrency-index/?utm_source=US%20Federal%20Reserve%20Launches&utm_medium=telegram&utm_campaign=Telegram%20Channel
7  Alternate cryptocurrencies / Tokens (Altcoins) / Re: [ANN] QUANTOR - Quantitative investments in decentralized economy on: June 22, 2018, 08:40:21 PM
Anthony Di Iorio, Co-founder of #Ethereum and #Bitcoin investor is eyeing at two Chinese #blockchain projects for his next big investments. "The biggest stake for me is in #Qtum and VeChain right now, the two Chinese projects. There’s much more opportunity in newer ones if you can identify them

https://www.bloomberg.com/news/articles/2018-06-21/ethereum-billionaire-looks-to-china-for-next-big-crypto-winners?srnd=cryptocurriences
8  Alternate cryptocurrencies / Tokens (Altcoins) / Re: [ANN] QUANTOR - Quantitative investments in decentralized economy on: June 22, 2018, 08:37:12 PM
Mining stands for the #decentralised process that sources the integrity of most #cryptocurrencies. Iceland is the first time cryptocurrency #mining within one nation has surpassed any other type of uses of electricity in the country. Mostly because of its location, volcanoues and magma - fueled power plants

http://www.bbc.com/capital/story/20180620-the-unlikely-nation-filled-with-cryptocurrency-mines
9  Alternate cryptocurrencies / Tokens (Altcoins) / Re: [ANN] QUANTOR - Quantitative investments in decentralized economy on: June 21, 2018, 01:53:45 PM
Nowdays widespread and acknowledged #ArtificialIntellegence in fact is known for decades: it emerged in the way we know it today in 1943. Just imagine, mathematicians stated the core of AI 80 years ago. The missing link to unleash its power was in fact the absence of technology. It's been caught up just recently, in fact mostly in the last 3-4 years with the recent explosion of #bigdata and ever-faster computers that brought about sweeping chaing in its so-called neural networks. And the underpining part of AI is deep learning which aims at resembling human logic through the employing the layers of kind of analogous of neurons. Deep - refers to many -layers structure.

However it is already been questioned by some experts in ints power to really drive meaningful conclusions and if that's type of learning is really deep. Some see the hope in the beyond- the - #deeplearning hub and argue that it's the right time to tackle more daunting challenges of Artificial Intellegence. Kindy is one of that projects towards higher precision, greater learning paths and overall performance, according to its founder .

https://www.nytimes.com/2018/06/20/technology/deep-learning-artificial-intelligence.html?rref=collection%2Fsectioncollection%2Ftechnology
10  Alternate cryptocurrencies / Tokens (Altcoins) / Re: [ANN] QUANTOR - Quantitative investments in decentralized economy on: June 18, 2018, 08:00:42 PM
"Intense interest" in #bitcoin prompted switzerland-based Bank for Internationsl Settlements (#BIS) to pursue to establish facts of cryptocurrency potential contribution to the wolrd economy. The report was overall reserved and brought into the spotlight such limitations like difficulties to scale and lack of trust.

Overall BIS arrived at the conclusion that despite that new technology attempts to alter the very foundation of money , #cryptocurrency can not replace conventional money. "

Hyun Song Shin summurized it like that: "Money has value because it has users. Without users, it would simply be a useless token. That's true whether it's a piece of paper with a face on it, or a digital token."

But some other experts may see here a direct statement of why cryptocurrency does have both: value and future. Without dismissing the hype around cryptocurrency, sheer numbers and bare facts are neither to be ignored: World The World Bank Group (#WBG) estimates that 42% of the global population still do not have access to a formal financial system. And it gives the edge to the cryptocurrency to tackle the opportunity and enter vast untapped markets waiting to be discovered. #Unbanked population is mostly concentrated in Asia and Africa and waiting to be discovered.

https://www.bis.org/publ/arpdf/ar2018e5.htm
11  Alternate cryptocurrencies / Tokens (Altcoins) / Re: [ANN] QUANTOR - Quantitative investments in decentralized economy on: June 17, 2018, 09:29:51 PM
Gold, the oldest financial commodity challenged by all sorts of new comers like cryptocurrency. Is it time to shrug it off ? By no means, says mr. Letwin, President and CEO of IAMGOLD Corporation, in his paper "Taking control of our destiny" that was published in May 18. "Gold mining, blockchain and digital strategies in the new era" is a self-explanatory description for the paper. Blockchain employed in gold industry signals a shifiting market landscape: hystorically resistant to change segment adopts cutting-edge technology. You can't pause the life, it is online, right? Maybe one of the biggest thing to have is a courage and wisdom to embrace the change.

https://www.thestar.com/wsj/markets/2018/06/16/bitcoin-pushes-ancient-gold-market-to-try-digital.html
12  Alternate cryptocurrencies / Tokens (Altcoins) / Re: [ANN] QUANTOR - Quantitative investments in decentralized economy on: June 17, 2018, 09:17:15 AM
Ambiguity and complexity in #stocktrading and #investments are exacerbating in the times of market decline and high volatility. However Bruce McCain, a prominent expert and contributor to the topic, says that investors should lean against seemingly bad news, not to quit the market but the reverse - advance.
#Algotrading which was traditionally executed by institutional investors is now coming to the individual traders and investors. Algotrading which is also known as High Frequency Trading ( #HFT) most obvious advantages are instancy of trade execution, accuracy and risk reduction. It multiplies profitable trade and eliminate risks. Don't feel defensive when the market circumstances are not to your favor: take the edge of ultra-advanced algotrading solutions. 💪😉💲
https://www.forbes.com/sites/brucemccain/2018/06/15/anticipating-bear-markets-with-a-multi-disciplinary-approach/2/#1b38a2b7616c
13  Bitcoin / Bitcoin Discussion / Ambiguity and complexity in #stocktrading and #investments are exacerbating on: June 17, 2018, 09:16:33 AM
Ambiguity and complexity in #stocktrading and #investments are exacerbating in the times of market decline and high volatility. However Bruce McCain, a prominent expert and contributor to the topic, says that investors should lean against seemingly bad news, not to quit the market but the reverse - advance.
#Algotrading which was traditionally executed by institutional investors is now coming to the individual traders and investors. Algotrading which is also known as High Frequency Trading ( #HFT) most obvious advantages are instancy of trade execution, accuracy and risk reduction. It multiplies profitable trade and eliminate risks. Don't feel defensive when the market circumstances are not to your favor: take the edge of ultra-advanced algotrading solutions. 💪😉💲
14  Alternate cryptocurrencies / Announcements (Altcoins) / #IanBalina #cryptoworldtour 2018 #QUANTOR #CryptoBazar on: June 16, 2018, 04:47:36 PM
#IanBalina #cryptoworldtour 2018 couldn't pass by wihtout our attention: #SergeBolsh and #VladBush from Quantor team were there. Incredible atmosphere, intense discussions and valuable takeaways is what we got on yesterday's exclusive conference by #CryptoBazar . Well, in short, it was awesome and yes, we are on the right track. Are you on board?🌏🚀🌠









15  Alternate cryptocurrencies / Tokens (Altcoins) / Re: [ANN] QUANTOR - Quantitative investments in decentralized economy on: June 16, 2018, 04:46:57 PM
#IanBalina #cryptoworldtour 2018 couldn't pass by wihtout our attention: #SergeBolsh and #VladBush from Quantor team were there. Incredible atmosphere, intense discussions and valuable takeaways is what we got on yesterday's exclusive conference by #CryptoBazar . Well, in short, it was awesome and yes, we are on the right track. Are you on board?🌏🚀🌠









16  Alternate cryptocurrencies / Tokens (Altcoins) / Re: [ANN] QUANTOR - Quantitative investments in decentralized economy on: June 15, 2018, 06:01:47 PM
Mr.Bannon, 64, ex - cheif strategist to President Trump. Mr.Bannon buys into #cryptocurrency , saying that they can disrupt banking the way Mr.Trump disrupted American politics". A while ago the offbeat of financial markets cryptocurrency goes mainstream and forges its way to the most reputable institutions of #WallStreet and prominent companies in #SiliconValley. Goldman Sachs is moving ahead to set up the first #Bitcoin operations at a Wall Street bank. https://nyti.ms/2l6ATMO
17  Alternate cryptocurrencies / Tokens (Altcoins) / Re: [ANN] QUANTOR - Quantitative investments in decentralized economy on: June 15, 2018, 05:47:37 PM
Hi, guys, how do you feel about yesterday Crypto #WorldCup Day 1? Did you make your bets on #Crypto Yoda or David Sønstebø? What a match, what a storm of emotions!
Feel puzzled? Don’t, it is still the same 2018 FIFA World Cup that takes place in Russia : CryptoCup is a World Cup prediction game that employs blockchain technology. As you might guess every team player has a crypto-related nickname.
World Cup is for sure one of the biggest betting events and it is great to see that blockchain is leveraged to clear up all the corruption and mess around sports gambling. Cryptocurrency and blockchain another time prove it is no longer an isolated geeky area but the very real part of daily life.

Let's share, whom are you cheering for at this Wolrd Cup? What is your favorite team, or maybe a player? What are your bets ?

Awesome picture Smiley https://cryptocurrencynews.com/crypto-world-cup/

18  Alternate cryptocurrencies / Announcements (Altcoins) / Quantor and Cryptocup #WorldCup on: June 15, 2018, 05:44:37 PM
Hi, guys, how do you feel about yesterday Crypto #WorldCup Day 1? Did you make your bets on #Crypto Yoda or David Sønstebø? What a match, what a storm of emotions!
Feel puzzled? Don’t, it is still the same 2018 FIFA World Cup that takes place in Russia : CryptoCup is a World Cup prediction game that employs blockchain technology. As you might guess every team player has a crypto-related nickname.
World Cup is for sure one of the biggest betting events and it is great to see that blockchain is leveraged to clear up all the corruption and mess around sports gambling. Cryptocurrency and blockchain another time prove it is no longer an isolated geeky area but the very real part of daily life.

Let's share, whom are you cheering for at this Wolrd Cup? What is your favorite team, or maybe a player? What are your bets ?

Awesome picture Smiley https://cryptocurrencynews.com/crypto-world-cup/

19  Alternate cryptocurrencies / Altcoin Discussion / QUANTOR cocept [Algorithmic investing] on: June 13, 2018, 07:29:55 AM
Hello everyone!

Quantor is a marketplace of investment algorithms and educational solutions for cryptocurrency and traditional financial markets!

Quantor is an ecosystem that integrates the marketplace of investment solutions and an online learning platform for crypto-currency markets, knowledge and skills of investment industry experts and developers of investment algorithms.

Computer technologies increase reliability and efficiency in the investment industry, reducing the risk of a human factor in making investment decisions.

The main objective of the platform is to create a know-how conveyor for the implementation of profitable and reliable investment algorithms in a decentralized economy.
20  Alternate cryptocurrencies / Altcoin Discussion / QUANTOR cocept [Algorithmic investing] on: June 13, 2018, 07:22:22 AM
Hello everyone!

Quantor is a marketplace of investment algorithms and educational solutions for cryptocurrency and traditional financial markets!

Quantor is an ecosystem that integrates the marketplace of investment solutions and an online learning platform for crypto-currency markets, knowledge and skills of investment industry experts and developers of investment algorithms.

Computer technologies increase reliability and efficiency in the investment industry, reducing the risk of a human factor in making investment decisions.

The main objective of the platform is to create a know-how conveyor for the implementation of profitable and reliable investment algorithms in a decentralized economy.
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