Amaranth Advisors emerged on the financial scene in 2000, an ambitious venture led by seasoned investment manager Nicholas Maounis. Operating from Greenwich, Connecticut, Amaranth quickly rose in prominence thanks to its audacious and dynamic…
The post Cautionary Tales of Poor Risk Management 5 – The Downfall of Amaranth Advisors: A Tale of Overexposure first appeared on trademakers.
The Swiss franc, traditionally viewed as a “safe-haven” currency due to its stability and the strength of the Swiss economy, has long played a pivotal role in the global currency markets. Leading up to 2015, the Swiss National Bank (SNB) established a peg with the euro, fixing…
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Before we delve into the saga of Jérôme Kerviel, it’s important to understand the institution he was part of – Société Générale. Founded in 1864, Société Générale is one of the oldest banks in France and boasts a storied history.
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Founded in 1762, Barings Bank was not just the oldest merchant bank in London but a beacon of prestige in the international financial sector. Its illustrious history and influential role in shaping global finance resonated across centuries and continents.
The post Cautionary Tales of Poor Risk Management – No.2 The Demise of Bearings Bank first appeared on trademakers.
Long-Term Capital Management (LTCM) was founded in 1994 by John W. Meriwether, the former vice-chairman, and head of bond trading at Salomon Brothers. The hedge fund aimed to take advantage of pricing discrepancies in the bond market using highly sophisticated mathematical models.
The post Cautionary Tales of Poor Risk Management – No.1 The Collapse of LTCM first appeared on trademakers.
Data mining, a process that uncovers meaningful patterns and correlations within large databases, has become an indispensable tool in the trading arena. It holds numerous advantages over traditional manual trading, revolutionizing the way traders operate.
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Probabilistic thinking is a critical cognitive tool derived from probability science. It is, at its core, a mental framework that allows us to deal with the inherent uncertainties of life…
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In the highly competitive world of financial markets, traders are continually searching for effective strategies to gain an edge and achieve long-term success.
The post The Minimax Mindset for Conquering a Sophisticated Market first appeared on trademakers.
To reduce the risks associated with inductive reasoning and better navigate the volatile dynamics of financial markets, traders must accept the markets’ inherent uncertainty and use caution when analysing historical patterns and trends
The post Overcoming the Limits of Inductive Reasoning – The acceptance of Antifragility first appeared on trademakers.
Traders and investors often rely on historical patterns and trends to guide their decision-making process in their pursuit of financial success. They hope to predict future market outcomes and capitalise on opportunities by analysing past market behaviour.
The post Beyond Guesswork – Examining the Impact of Inductive Reasoning first appeared on trademakers.
It is easy to be swayed by stories of those who appear to have mastered the art of trading, generating impressive returns and thriving in the face of adversity, when it comes to understanding success in the financial markets.
The post Survivorship Bias – No One Remembers the Losers first appeared on trademakers.
Cognitive biases such as confirmation bias and availability bias can have a significant impact on trading decision-making. These biases can cloud our judgement and distort our perception of reality, causing us to make poor decisions.
The post Are you skilled at trading, or just lucky? first appeared on trademakers.
When we think of the African jungle, we imagine a lush and diverse ecosystem, where species thrive through the natural selection process. Surprisingly, the same principle applies to evolutionary machine learning in trading
The post bMAMS: Mimicking Nature – The Evolutionary Leap in Algorithmic Trading first appeared on trademakers.
Risk management is one of the most critical elements of successful trading system development, yet it is often overlooked or misunderstood. At its core, risk management is the art of balancing risk and reward, protecting funds from market volatility while maximizing profits.
The post bMAMS: Managed Account Service: Mastering the Art of Risk Management in Today’s Risky Markets first appeared on trademakers.
WARNING: The recent demise of Silicon Valley Bank, a dominant force in the technology financing sphere, has sent shockwaves throughout the investment community, triggering a sense of apprehension regarding the potential for market instability and losses. The bank’s abrupt downfall has laid bare the vulnerability of the banking sector.
The post SVB Collapse Sparks Investor Anxiety: Protect Your Investments with bMAMS first appeared on trademakers.
Unleashing the Power of Algorithmic Trading: How Data and Math Make Investing Safer and More Successful. In recent years, algorithmic trading has emerged as a dominant force in financial markets, attracting interest from investors and traders alike. One of the key reasons for its popularity is the safety and reduced risk it offers compared to manual human trading.
The post bMAMS: How Data and Math Make Investing Safer and More Successful first appeared on trademakers.
In the realm of financial markets, an undeniable trend has emerged – an inexorable shift towards the use of data mining for trading strategies. This is no mere fad, but a bona fide revolution in the way trading is done.
The post bMAMS: Advantages of letting machines do the work first appeared on trademakers.
The future will reflect the past- but it won’t be the same as the past. By manipulating and changing the actual bar chart data of an instrument we can test how a system will go on a similar, but different version of history- an effort to make the past simulate the future.
The post bMAMS: Using maths to make your funds safer – changing the charts first appeared on trademakers.
This week we look at another Monte Carlo Analysis statistical tool- skipping and adding trades. Like last week’s trade re-ordering it is designed to stress test a system and give a more complete idea of the risk profile it is carrying.
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bMAMS uses different statistical methods to demonstrate or prove that our trading systems will perform in a real, unknown trading environment.
The post bMAMS: Using maths to make your funds safer – Trade reordering first appeared on trademakers.