The Online Investing AI Blog

The Rolling Stones–via Irma Thomas–just needed time on their side. But for traders, you need time… and probability.

That’s where QuantDNA comes in. QuantDNA offers the probability of price movements for assets based on a proprietary formula.

QuantDNA is not a new site; they’ve actually been at the financial biz for a while and are associated with some of Wall Street’s big names. I was impressed with the first version. However, they’ve worked on some upgrades and updates to make it one of the most impressive financial tools out there today.

This is actually QuantDNA 2.0.

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Accelerating Technology, Investing, Money, Online Investing AI market, prediction, probability, quantdna, stock market, subscription, tech, technology, trial

Pic @ Flickr Creative Commons

I’m in with the in crowd, I go where the in crowd goes

–Dobie Gray

We all want to be part of Dobie Gray’s in crowd, don’t we?

It’s a good feeling to be accepted and popular. Being popular improves our self-esteem and sense of value. We also feel we’re right in the decisions we make when the crowd agrees with us.

Does that extend to the stock market? According to a study published last week in the journal Current Biology, the answer is “you betcha.”

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Investing, Money, Online Investing AI, Success, US Economy emotions, finance, fundamental, indicators, psychology, science of trading, sentiment, stock market, technical

There’s one theory that says the stock market is unpredictable because the stock market is made up of people. Since human behavior is unpredictable, the market must be unpredictable, as well.

The theory has a lot of adherents.

And, a quick review of the, oh, let’s say past three weeks, shows an amazingly volatile market.

But, according to a book by Albert-Lazlo Barabasi, human behavior might not be as unpredictable as you would imagine.

His book, Bursts, the hidden pattern behind everything we do, is a soaring look at the theory that you can predict human behavior, if you can just understand bursts.

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Accelerating Technology, Great Books, Investing, Online Investing AI, US Economy book, books, bursts, Great Books, human behavior, predictability, probability, random, stock market, wealth

Pic by phaul @ Flickr

Just when you thought it was safe to start spending and investing again, right?

The recent turmoil in Greece has had a bubbling effect throughout the world. The crisis may or may not have been responsible for about a trillion dollar drop in the stock market, but it was definitely responsible for a trillion-dollar bailout.

But, who cares? Those things are not on your personal financial radar map.

Or are they?

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Investing, Money, Online Investing AI bailout, consumer, finance, greece, greek, interest rates, Investing, Money, predictions, spending, stock market, taxes

pic from artemuestra @ Flickr

It’s now drifted into stock market legend, so we’ll probably never know the truth, but here’s the story: Last week, the market suddenly and inexplicably imploded.

It was already a bad day on Wall Street. The Dow was down a couple hundred points on May 7. Without warning, though, the market plummeted nearly 1,000 points.

The reason for the fall–or perhaps the excuse–was that a trader wrote an order to sell a “billion” shares, instead of a “million” shares. The massive loss was the difference between a “b” and a “m.”
Before we get too snide about this bad-typing trader, it’s important to remember we’ve all made financial mistakes that turned into an avalanche.

I know I have.

There’s the mislaid bill that I swore I paid. It turned into late fees and higher interest. While it wasn’t exactly lead to a stock market sell-off, the lingering effect of those high payments lasted for years and cost me hundreds. I picked up a couple of hot stock tips that blew cold while I wasn’t watching.

So, how do you avoid the financial mistake avalanche?

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Accelerating Technology, Automated Trading, Investing, Money, Online Investing AI, US Economy automate, billion, bills, million, mistakes, sell-off, stock market, stocks, trading

shioshvili @ Flickr

This isn’t New Agey hocus-pocus, necessarily.

This is reality.

The things you think about. The things you believe. The things you read and watch. The things that make you confident and the things that make you fearful are the very foundation of wealth generation–on a lot of levels.

The pricing of stocks and other assets reflect beliefs about their value. These beliefs aren’t just the thoughts and opinions of analysts and big-time market movers, they reflect your ideas, too. Now, your personal belief may just represent a fraction of that price, but when merged with the collective sense, you have mass market psychology.

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Internet, Investing, Money, Online Investing AI, US Economy belief, beliefs, indexes, information, market, Money, stock market, wealth

Pic courtesy DavidDennis @ Flickr

There’s a killer on the road. His brain is squirming like a toad.
–Jim Morrison

Remember Jim Morrison? He was the Lizard King.

Seth Godin says that being king of your lizard brain is a good thing. For Seth, the lizard brain is that deep, dark shadow of the evolutionary past. It’s the part of the brain that squirms with the fear, fight,  flight, and fornicate responses.

Even though the lizard brain hasn’t been called on to lead us out of sticky situations involving bears and mastodons in thousands of years, our lizard brain still pumps out signals of imminent doom and demise in the form of resistance.

Resistance, according to Godin, leads to compromise and failure. (Steven Pressfield talks about it here, too.) Resistance and compromise have implications in personal finance.

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I recently read Robert Kiyosaki’s latest book, Conspiracy of the Rich. I highly recommend it to everyone because it explains so much of what is happening around us. It also helps us question so many of the things that we tended to  just accept.

One of the things he points out is that the government is diluting our money through inflation. And I think it’s true. After doing some research, I discovered that the CPI is not only inaccurate, but is designed to understate inflation. The government pays money to people and other governments based on the CPI. It pays money to people through programs such as social security. It pays other governments to repay the money that it has borrowed.

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Great Books, Investing, Money, US Economy books, conspiracy of the rich, dollar, kiyosaki, Money, saving, stock market, Success, wealth

In 1997 chess grandmaster Gary Kasparov met the Singularity. And the Singularity won.

In 1985 Kasparov easily beat a chess-playing computer, even though he resorted to a trick to out-Kasparov the machine’s Kasparov program. Eleven years later, though, the chess legend struggled with Deep Blue, a computer with even more powerful processing power. But even Kasparov couldn’t compete with Deep Blue once its development team doubled the processing power a few years later.

Kasparov was beat, but he drew new lessons from the run-in that he details in New York Review of Books. These lessons might help you become a smarter–and less anxious–trader.
According to Kasparov, the exponential gain in technology didn’t ruin the game; it actually had some surprising aftershocks.

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Accelerating Technology, Automated Trading, Investing, Money, Online Investing AI AI, artificial intelligence, chess, chess match, discipline, stock market, trading

L.Marie@Flickr

As the maker of Automated Trading financial systems, we offer a few reasons why computer-based trading can help investors. They operate continually. They edit out emotions. And, they can be programmed for success.

When it comes to trading, it seems that most humans are programmed to lose.

This week, we’ll take a look at the ways you and I can be programmed to lose, especially when it comes to trading decisions.

In today’s post, we’ll take a look at social proof, a psychological theory, that may exert a powerful influence on unsuccessful trading strategies. Social proof is nothing more than “follow the leader,” except, in this case, no one knows who the leader is. And no one knows why the leader is the leader.

Here’s how it works.

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Automated Trading, Investing, Money, Online Investing AI, Success lose, market, Money, programs, stock market, stocks, trade