Trial and Epic Fail

Ventures of an indie game developer

Crypto currency trading

Ok, so stock is dead, long live the crypto currency trading. From the looks of it BitCoin may well go up 4.8% a week, as it did overall in 2017 during the whole 2018 as well. Or possibly as much as 6.5% per week, as it's done last 6 months of 2017. Welcome to the frenzy!

I expected the other crypto currencies to be very small, and extremely volatile, which is just not true. Etherium is just 3 times smaller than BitCoin and BitCoin Cash is just half of that. Other notables are Dash, Lightcoin and Monero, which are also doing very well.

At first I'll just manually poke around while I twiddle my py-pandas scripts. These are the golden days of crypto currencies, and everything is just going up, up; so you'd frankly have to make an effort to do badly. The first decisive fractions of a BitCoin I bought was 11 days ago. Since then the price (or interest if you will) has gone up by 19.4%. Eh... sorry. 19.6%. If you extrapolate to a yearly basis (totally urealistic), it would correspond to a bank account with an interest of 34,000%.

The major banks are slowly getting in on the action, and soon the everyday workers will pitch in for some high-risk retirement savings. I think the nearest couple of months are going to be absolutely insane.

COP ~500

The future is here!

If statements running ahead of me

The most trivial implementation of a technical analysis trading robot did not work. I'm abandoning that track. It's been nine months or so of experimentation; probably not useful but somewhat interesting.

Before giving up entirely I'll also try applying convolutional artificial neural networks to the problem, but then using ETF's instead of bull/bear contracts. I just need to learn the basics first. This is going to be a one year and three months project at the very least, pretty far from where I envisioned it when starting to hack away at first.

Apart from that a colleague had an interesting business idea we might follow up on. My most interesting spare time projects are being pushed further into the future. Well. Always been a slow starter.

Evolution of humanity

Got an epiphany this morning. I've become something of a religious mystic last couple of years. If you remove the religious dogma and the unresearched mysticism. So have been thinking a lot about meaning of life and what comes next etc. Haven't spent much thought about the physical life for us humans though.

If you're going to follow me on my trail of thoughts, you may need to jump a few hoops. Big jumps for some, but all have strong scientific evidence obtained via orthodox scientific methods. Bear with me with the first three even if you find the bullet hard to bite, I think it will be worth-while.

[1] So let's pretend psychic functioning is real.

[2] And survival of consciousness after bodily death is not superstition.

[3] And reincarnation is not a figment of vivid eastern imagination.

[4] And autism is on the rise. Note the log scale.


[5] Burnouts are on the rise. An unsubstantiated number I've heard is that 200 people out of the 1M employed in school and healthcare in Sweden burn out every day. Even half of 0.2‰ is an enormous number.

[6] Manual labor is moving over to robots, and even if not totally replaced by autonomous systems, most jobs will eventually go away.

[7] Next month, November 2017, a totally revolutionary, green, cheap energy system will be unveiled.

Everybody agrees on the 4-6, at least in principle. 7 might be debatable, but at least we'll all know within a month. What might be the consequences for human evolution if 1-3 is true too?


Where does this lead?

Let's start with the burn outs. They're caused by high levels of stress, induced by unnatural working conditions, low level of control, constant high pressure to perform, abstract expectations of output, lack of faith in anything but a larger TV or shinier car. Let's also here note that one of the best methods of repairing a brain damaged by burn-out is meditation and yoga.

So number [7], the energy revolution. Free energy for everyone means air condition for the poorest affected by climate change. It means low living costs for us living in the cold. According to Einstein, E=mc2, so not only transports, but all material will be cheaper too. When combined with autonomous welding, painting, cutting, sewing, vacuuming, lawn mowing, driving, buildingshipping and farming, we basically have free labor too. At first this will cause a push towards even more abstract jobs, causing still more burn-outs. More burn-outs, more meditation. However, within a couple of generations only service, care, schooling and engineering will be required of humans if we throw out the unnecessary meetings, processes and roles.

What then? What happens when most people don't have jobs? For one, economy as we know it will change fundamentally. But what about peoples minds? When we are not needed apart from reproducing ourselves, something -- deeply ingrained within us over the evolution of man -- breaks. We are built to work for our survival. Resting on our laurels a whole life-time would be nightmarish to most. A gigantic movement for "finding oneself" will take rise, with more meditation as a result.

Meditation boost psychic functioning. Autism is correlated to psychic functioning. Group psychic functioning is stronger than individual psychic functioning, and can even sooth the minds of hardened criminals today. If reincarnation is real, meditators will be reborn, autistics will be reborn, and a small part of their psychic functioning may follow into each next life, steadily increasing over time.

Eventually these psychics could be the new working-class, outnumbering the rest of us; and of course most grunt-work will be performed by robots. The psychics' jobs would be to help researchers by amplifying their experiences, such as clairvoyantly scanning the seas or jungles for new archaeological sites or uncatalogued animals; peeking into black holes or distant inhabited planets; using psychokinesis to suppress floods, earthquakes, volcanoes and meteoroids. Helping the police catch criminals is perhaps obvious (Minority Report come to mind). Healing sick, reducing pain. Sending love to the lonely. Accumulating wisdom from the past (and possibly future). Their jobs would consist of a tremendous amount of sitting still concentrating, which might seem exceptionally boring to us, but would at the same time be incredibly important. And let's not forget that the happiest people on the planet right now are meditating solitary monks.


This change in society could be as fast as 6-7 generations, but massive resistance from conservatives, religious dogma and feeble cultures and traditions may delay it somewhat, but at the latest this may be the natural evolution of man in no more than 15 generations.


YOU IDIOT!!!

To most westerners today this must seem like the ramblings of a junkie, since they are unaware of the strides of modern parapsychology since circa 1990. To half of those familiar with parapsychology, but believe [2] and [3] are not real, but only artifacts of wishful thinking combined with super-psi, this must seem like superstition. But to easterners and the few knowledgeable this might not be too far fetched. And may, in fact, be the only alternative to Wall-e's future.

Waiting for the future

Before my small trading funds was eaten up by commission last week, the trading robot looked promising. Well, not if you look at the actual dough.


But 250 SEK(Swedish Crowns, equivalent of ~25 EUR/USD) is expected to be consumed by commission. But if I rebase the curve on percentage increase in stock price and a fixed commission, the top curve shows approximately what the result would have looked like if I'd injected 8k SEK.



My actual increase in value over four days between A and B would have been 4.71%. Which is probably, but not certainly, due to luck. 4.71% over four days amounts to over 6000% on a yearly basis. That is highly unrealistic irl.

But I've just injected a bit more cache. Learning money, let's call it. This type of hands-on is a lot better than a theoretical course on the stock market, and probably a lot cheaper too. In a few more days I should know if the robot was just lucky, or if I actually could use it as it is.

My thinking is still that I need to transition to using normal stock (ETFs) to be able to make a profit. And possibly also implement an AI instead of some dumb if-statements. Currently I only use the stock price as input, but I may need to use the volume too to get a good enough estimator. As of yet I hardly understand the workings of a convolutional ANN, and there seems to be a little bit of a theoretical threshold before one can get started on such a venture. For the first time in years I'd have to start digging into documentation. Peuh!

Feasibility of if statements and mechanized friends

Since one and a half months my latest robot has only made 4 purchases. Of those, 75% were a catastrophe:

The jittery stuff is the actual stock movement, the straight drop ending each ownership period is the difference between asking and bidding price. On that good day, the robot bought a x12 Danish bull contract on silver, which gained 3.8% in 5 hours and 15 minutes. Discounting the 3.2% price difference, there is only 0.8% left. I checked the autocorrelation of that instrument compared to a few others where my deals haven't gone too well and noticed an interesting thing:


It's not surprising that silver prices are fairly stable, but it's curious that this is where my soft-coded if statements happened to make a worth-while deal.

From very few datapoints I guess that:
  1. The volatile price gap between buy and sell is making leverage instruments hazardous.
  2. The big price gap makes it near impossible to make a profit by owning an instrument a few hours.
  3. Stable instruments might work better.
So what instruments are stable and have lower price gap? Well stock is and does. D'oh! Back to square one.

I've decided to give machine learning a try. Using backpropagation means not knowing what I'm doing, but I've come to the conclusion that only pattern matching can give a good profit, if I keep using soft-coded if statements I'm only going to manage a slight profit at best. The machines are our friends.

Recluctant trader

My robot has refused to make any bets so far, so no trade has taken place since the re-write. I don't even know if it works in practice. For tomorrow (Monday) morning, I'll switch to a more risk-taking algorithm, which should trade more frequent (and at higher risk). Before going all in I'd like to see it work. So far I've lost 200 Euros (not counting the time I've spent) to prototyping. As soon as I've pulled through a whole cycle of trading, and done the due analysis, I should hopefully be able to inject around 1000 Euros and be scared shitless.

About the author

Mitt foto
Gothenburg, Sweden