Phylosophy

Calm in Adversity, Steadfast in Pursuit


Research & Edge

People Make Mistakes

People Have Biases

Heuristic Thinking

  • Heuristic thinking involves using limited knowledge to quickly arrive at solutions to problems.
  • However, relying on incomplete information often leads to cognitive biases or psychological errors.
  • Also known as "heuristics," these mental shortcuts allow us to process information more efficiently, but they can result in systematic biases.


Researchers have identified

Three common types of heuristic thinking:


  1. Availability Heuristic
  2. Decisions are made based on how easily certain information comes to mind. For example, a person might overestimate the likelihood of an event if examples of it are easily recalled.
  3. Representativeness Heuristic
  4. Decisions are made by comparing something to a mental prototype or representative example. This often leads to overlooking base rates or broader statistical information.
  5. Anchoring and Adjustment Heuristic
  6. People start with an initial point or idea (the "anchor") and adjust their beliefs or decisions based on that starting point. However, adjustments are often insufficient, leaving the final judgment biased toward the initial anchor.


A Close Look of Our Strategy

Behavioral Finance

  • As Robert James Shiller highlighted in Irrational Exuberance, when the market deviates from normal rules, human psychology can drive its dynamics. Based on the behavior of irrational investors, we observe patterns in their trading decisions, construct corresponding indicators through quantitative measurements, and use these models to simulate their positions.

  • Additionally, for different categories of underlying assets, we meticulously fine-tune optimal parameters to generate dynamic trading signals. When market prices significantly deviate from their intrinsic value and volatility rises, our algorithms are designed to dynamically and precisely trigger buy or sell orders.

Our Strategy

  • Systematic Trend Trading
  • Behavioral Factor Models
  • Capturing and Quantifying Irrational Behavior
  • Quantitative Algorithms and Machine Learning Models

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