Vision Alpha

The modern world is constantly becoming more dominated by data. More data has been created in the past two years than in the entire previous history of the human race and it is estimated that by the year 2020 every human being on the planet will generate around 1.7 megabytes of new data for every second of his or her life. Making efficient and practical use of all of this data is not a trivial task. In fact, it is also estimated that only 0.5% of all data is ever used or analyzed. This presents a challenge and an opportunity for companies to gain a competitive advantage by thinking outside of the box and making use of data in a manner that produces tangible value.

Furthermore The modelling of financial systems continues to hold great interest for not only researchers but also investors and policymakers. Many of the characteristics of these systems, however, cannot be adequately captured by traditional approaches to financial modelling. Financial systems are complex, nonlinear, dynamically changing systems in which it is often difficult to identify interdependent variables and their values. A key inadequacy of much economic theory is that it postulates exact functional relationships between variables but in financial data points rarely lie exactly on straight lines or smooth functions. Attempting to accommodate these nonlinear phenomena often introduces an unacceptable level of instability in models.

The world of foreign exchange trading is no exception. In fact, one can argue that the potential for gains in the forex market is substantially higher than in others due to the fact that forex is an extremely data-rich domain. If this is taken into consideration in conjunction with the fact that forex is also the world’s most volatile market then it is sensible to attempt to explain portions of the volatility in the market using available data.

SIXCAP has embraced this methodology and taken it one step further through the Vision Alpha platform. It is easy to forget that, despite the fact that forex is extremely rich in data, the forex market is completely driven by human behavior and actions. the Hippo Data team and the creators of Scheduit in collaboration with SIXCAP, the Vision Alpha platform aims to embrace and make use of this fact by allowing human traders to alter and adapt the behaviour of trading algorithms in real time.

This innovative approach is different to most trading algorithms which mainly act upon technical indicators and KPIs. Such strategies can still prove to be profitable but SIXCAP believes that human insights can serve to further improve the performance of algorithms which are only based on historical data. Furthermore, the Vision Alpha platform also makes use of sentiment on social media and correlates it to the sentiment of its traders and signals that it receives from custom machine learning model to further increase the value of the available data.