Learning Process

In 2003 We started  in the 
typical muppets limbo:
90% greed 10% know-how

 

today, we know our need is
10% greed 90% know-how

 

accumulating many years
of experience and expertise
the hard way... We discovered...

 
the apparent need was capital   the real need was  expertise.

 

After more than 10 years accumulating market expertise we reached the conclusion most guys selling strategies fit this list : self-appointed gurus , pseudo-wizards , spin doctor professors , do-it-yourself rookiees , ego driven bank clerks , lifelong dud gamblers , con artists.

A thing they all have in common: what they really provide are very expensive ILLUSIONS, hard to debunk till is too late. Thus a simple debunking question would suffice:

<< if it works why don't you use your strategy ? >>

They expect you to be too blindfolded from your own greed or lack of expertise to make such question. It took some years but we finally understood that the only real Guru is a crash-test dummy as he is used to learn things from market the hard way and thus carrying the real wisdom: expertise and this is why Autoscalp is an expertise driven think-tank.

Probably the best way to transmit you our philosophy is straight from the source, thus quoting some answers given by our fellow founder Matteo Gandola during a few events demos and meetups. After a demonstration in Shenzhen upon a question concerning core variables of a trading model he returned:

,,

you can hire sales , buy technology ...
but nothing can replace the core of a speculation:
the progressive improvement of your expertise.

,,

[A reply which the audience enjoyed so much that has become the official autoscalp tagline]

"Autoscalp, improving your expertise"
www.autoscalp.com © 2005-2006-2007-2008-2009-2010-2011-2012-2013-2014

Through our market expertise we research speculative models and transform them in proprietary tools. Since our backgrounds are heterogeneous by choice , at autoscalp we avoid falling in dangerous short lived mainstream logic :

Known memes and logics which We didn't follow , We don't follow, We won't follow !

The IT motto: code to profit- profit to code

The web hoster rule: feed the host to host the feed

The broker's motto: skin the muppets

The Fund manager's leitmotif: keep them happy, keep them uninformed.

Th Banker's motto: more volumes - more commissions

or historically (with the name of the scam "in fashion")

  • 1980 ... Butcher & insurance (ponzi)

  • 1985 Pink Sheets logic: hype it and squeeze them  (bucket shop)

  • 1990 Tech analysts rule: draw a time chart and make believe (ponzi)

  • 1995 Dot commers motto: buy anything that moves (pump and dump)

  • 2000 Retail brokers: pump the hype, squeeze the muppets (soft dollar)

  • 2005 FX market makers motto: spread them , margin them (ponzi)

  • 2010 Quant farm logic: more brains, more sheep to shear (soft dollar)

  • 2015 Crypto rip-off logic: pull them in, drain them out (ponzi)

  • 2020 AI tech firms logic: open the code out, close the profits in (bucket shop)

  • 2025 Fangs fugazi: cyber panic, real profit (pump and dump)

  • 2030 AI driven "the demise of the gang of Central Banks" (ponzi)

We also call these the "jailed in 5", because every scam above lasted five years
before Governments started prosecuting the scammers on a regular basis.

We decided to redesign expectations from sketch and follow the simple "alpha comes first" concept.
None of the guys above did that. They acted on a temp attitude : narrow minded self-referential interest,
They didn't create solutions. They created the problems to provide a solution for.

Our view instead is:
first comes the speculative idea to reach the alpha, then all necessary steps to make it working. We consider coding just an intermediate phase of a more complex and very creative process where profitability of trading models mostly lies in the funneling of experience. Balancing the two factors allows us to expand our creative process rather than cage it .

If you apply our philosophy to today's market situation: you can get why, while Quant Trading is still in fashion, we think it won't last. Quants act on a self referential profit rule and so you see more flash crashes, sudden huge bank losses , systemic failures are on everyday newspapers...

Quoting our founder partner Matteo Gandola invited as guest at a Master Course in Milan:

,,


To understand our success, just start from others' mistakes:

first came the Internet bubble and their motto was : "we buy anything Internet..."

then came the prophets: "we can forecast markets..."

then came the quants: " we can trade at light speed..."

It was their short minded view that led them to failure, not their trading models. Each of these Phenomena usually lasted less than 5 years and inevitably ended up with people selling books, courses, or doing tv trade talks or setting up huge consulting firms...
rather than keep trading on the markets, which should have been their real job.

Our market approach is radically different.
Is putting what we want ahead of what we need.
This is why our tools are so different and innovative.
We think them the way we'll have to use them.

,,

 

 



Understanding our philosophy:

We created our alphas and our tools to use them , not to sell them.

We wanted to invent a new, non linear qualitative trading algebra:
our renko based algebra.

We wanted to create a new flexible modelization tool...
now is our price engine that works with dark pool logic not with brokers one.

We wanted to invent a new pricing model not OHLC based...
and that is our multiple pricing model which is time-frame independent.

We wanted to be capable of catching instantaneous trend...
and we invented our famous sniffer model .

Without knowing we gave our business a clear path and a peculiar identity...
and our think-tank was born.

Synthesis:
we don't create tools following any external paradigm . We create tools which extend our creativity based on our experience as we rejected the idea of creating tools that cage it importing external paradigms. The core reason being that importing external paradigms , often standardized ones,  forces inheriting and reiterating the same mistakes of the predecessor who injected the paradigm did. Doing something forced by marketing or profits by the very nature of such concepts, makes the research output doomed by obsolescence since inception.

...there is no such thing as standardized research model in creating an innovative tool.



Example of application of our Philosophy and view, 
Q&A session , after think-tank meeting.  (Dubai, 2011)

Excerpt:

  • If quants meet their sunset, what to expect ... next?

in my view, it will be an era of small de-localized market pools. Liquidity will regroup in structures much smaller than today's markets. Such liquidity pools will be either delocalized and decentralized but won't be as fast as markets are today .

  • Will HFT finally disappear ?

HFT is a tool, a dangerous one in the wrong hands but is a tool. HFT will be probably exploited by governments as a strategic resource, probably to defend commodities pricing from arbitrage attacks rather than allow HFT to run bank driven wild attacks on markets .

  • Can you explain it more clearly?

Banks exploited HFT through flash trading applications and created huge disasters but flash trading is an aberration of the HFT concept .
Banks are losing their one century wide grip on markets, markets are decentralizing and fragmenting themselves at an unprecedented speed. Banks failed maintain the status-quo using HFT. So now they want HFT to be banned. But is the problem HFT? Or HFT is just is one way market is escaping the banks' grip?

  • But what if they shut down HFT?

Historically speaking, any attempt to block market innovations failed. Shutting down HFT might even accelerate the switch from Dollar to Yuan as world base currency because liquidity is now faster than ever and money goes where is most efficient, not where banks like it .  Market always finds a way,  about Banks... I'm not quite as sure.