Game Theory

November 26, 2016 • Reprints

Train your brain to trade

Bloomberg Tradebook, Bloomberg’s global agency brokerage business, in partnership with risk and trading psychology practice, The ReThink Group, has unveiled a tool that helps traders sharpen the skills they need to predict short-term price movements. 

Bloomberg Tradebook Trader Exercise, which is a “brain exercise” game that displays a series of videos that depict the movement of shapes and traders must study each scene and then anticipate the direction of the shapes’ next move (see “Advanced three car monte”). The ability to do this successfully correlates to the trader’s skill in predicting short-term movements in price.

The Trader Exercise is based on a study conducted by Antoine Bruguier, Steven R. Quartz and Peter Bossaerts at the California Institute of Technology, published in the Journal of Finance in 2010. The study, “Exploring the Nature of ‘Trader Intuition,” looked at how uninformed traders infer information from the trading process and found that the skill in predicting price changes in markets is more strongly connected with Theory of Mind, or human capacity to discern malicious or benevolent intent, than mathematical skill.

altSo, will this help the short-term fundamental trader? “It’s not geared toward a specific type of trader. The idea is more general in the intention of helping any type of trader with the timing of their trades,” says Sabrina Gagliotta, head of America’s Equities Sales and Trading at Bloomberg Trade book. “The idea is that by doing the exercise and following a series of shapes and observing the movement and really just predicting the next move, should help any type of trader and it doesn’t have to necessarily be and equity trader. It can be an options trader [or] a futures trader. It can be used across a multi-assets traders. The idea is to really just focus on a skill set that should help a trader with the timing of their trades.”

Gagliotta says the program was created because it aligns itself with the company’s mission, which is to always empower our traders. “We want to put tools in the hands of our traders to use while they’re doing their daily job. Historically what we’ve done is invested in technology itself, so we wanted to do something a little bit more creative, more innovative. A little bit more outside the box,” she says. 

But can these games really train your brain to trade? 

“Scientific evidence shows us that more than mathematical or logical ability, a trader’s mental and emotional skills are what is critical to trading success,” said Denise Shull, founder of The ReThink Group, which offers proprietary coaching, training and assessment tools designed to enhance human performance. “By stimulating the parts of the brain responsible for predictive ability, the exercise is helping traders to sharpen the skills associated with high performance without the pressure of executing real trades,” she said.

If you’re still on the fence, Gagliotta says it’s something that’s easy to use, and despite only having been released a couple of months ago, traders are already trying it out, with more than 2,500 individuals that have completed at least one of the videos and more than 1,700 individuals that have completed at least two videos. 

Bloomberg Tradebook Trader Exercise can be accessed via the Bloomberg Professional service by visiting www.TraderBrainExercise.com, and is optimized for use on IOS mobile devices. Check it out, its fun. Will it make you a better trader? We can’t say but it could relieve stress while training you in pattern recognition.

altCentral banking: QE the board game

In 2006, 51-year-old Cubiko Games founder Gavin Birnbaum grew a curiosity for fiat money after participating in online forums on the housing collapse. “Fractional reserve banking was a revelation — I spent many hours reading and learning,” he says.  

Brinbaum then bought gold for insurance against the mad people at the U.S. Federal Reserve and Bank of England. Worldwide quantitative easing ensued. 

This month, his central banking and quantitative easing-inspired handcrafted wooden board game QE is on its way to London’s largest game exhibition. It invites consumers to strategize their way out of financial crisis. How so? Well, 16 “too big to fail” companies from four countries need bailing out. So, the central banks have unlimited financial resources; lots of money will be printed. However, print too much and they risk disastrous hyperinflation.

In the game QE you play the role of a central banker bidding on different size companies to accumulate various levels of victory points. The amount you bid is unlimited — you are the central bank and you own the printing press. After the opening bid by the lead player and the other players bid in secret. When 16 companies have been “bailed out,” bonus victory points are awarded for company sets of nationalization, monopolization and diversification. 

Next, players add up the total amount of money they printed. The player who printed the most suffers hyperinflation, forfeiting all of their points. The player with the most points at the end of the game is the winner.

After only a few days campaigning with Kickstarter — the crowd-sourcing platform aimed at supporting creative projects — the listing has secured enough in pre-orders to produce the niche game for investors with a sense of irony and aspiring central bankers.

Birnbaum established his board game company in 2009 and named it after his first game “Cubiko.” He says, “The inspiration for Cubiko came as I sat on the floor with my four-year-old son playing with his toys. 

I rolled a ball onto his toy box and it sparked an idea,” says Birnbaum. Eight months later that idea won “Best Family Game” at the UK Games Expo. “I never imagined that seven years on I would release another 11 different games and be established as a British board game designer.”

You can still order QE on Kickstarter through the first week of December. Search “kickstarter QE game.”

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