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Can you trade better than a rat?
Started:September 23rd, 2014 (12:28 PM) by shodson Views / Replies:491 / 9
Last Reply:November 5th, 2014 (01:41 AM) Attachments:0

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Can you trade better than a rat?

Old September 23rd, 2014, 12:28 PM   #1 (permalink)
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Can you trade better than a rat?

Investment rats | The Enlightened Economist

One project is Michael Marcovici’s Rat Trader. The book describes the training of laboratory rats to trade in foreign exchange and commodity futures markets. Marcovici says the rats “outperformed some of the world’s leading human fund managers.” The rats were trained to press a red or green button to give buy or sell signals, after listening to ticker tape movements represented as sounds. If they called the market right they were fed, if they called it wrong they got a small electric shock. Male and female rats performed equally well. The second generation of rattraders, cross-bred from the best performers in the first generation, appeared to have even better performance, although this is a preliminary result, according to the text. Marcovici’s plan, he writes, is to breed enough of them to set up a hedge fund.

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Old September 24th, 2014, 08:06 AM   #2 (permalink)
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Old September 24th, 2014, 01:52 PM   #3 (permalink)
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Similar motivation (feeding/electric shock) would likely work equally as well on humans, lol.


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Old October 3rd, 2014, 07:46 PM   #4 (permalink)
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When I saw the title of this thread I was expecting something regarding The rumpled one{TRO}....

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Old October 18th, 2014, 10:44 AM   #5 (permalink)
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Futures Edge on FIO

How much money do you need to trade futures successfully?

Here's a follow-up article

The Artist Who Trained Rats to Trade in Foreign-Exchange Markets - The Atlantic

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Old October 18th, 2014, 05:47 PM   #6 (permalink)
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Some Cheesy Thoughts

Next flash crash I am going to wonder if somehow a rat was involved......or when I am relaxing at the beach next summer and a big fat rat is drinking a Pina Coloda next to me while reclining on a chise lounge while reading the wall street Journal will I be curious and ask him what he does for a living.


Last edited by quantismo; October 18th, 2014 at 07:14 PM. Reason: spelling error
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Old October 19th, 2014, 09:57 AM   #7 (permalink)
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Similar motivation (feeding/electric shock) would likely work equally as well on humans, lol.


Anyone have a source for an interface that will shock me when I make a bad trade?

I bet this would work better than 90% of the strategies most traders are running now.

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Old October 19th, 2014, 12:41 PM   #8 (permalink)
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Of course the rat has an advantage. He does not know what the market is. All he knows is that when he hears price go up he should buy, and when he hears the price drop he should sell. He has no bias as to what he thinks the market should do.

It wouldn’t be much different than hiring someone who knew nothing about the market to trade your system. You show him the plan and pay him by the hour to enter and exit trades based on the plan. The outcome of the trade makes no difference to the amount of money he earns. If he doesn’t follow the plan to the letter then he gets fired.

I'd be willing to bet that the majority of traders who come up short of their aspirations do so because they don’t have a plan or they don’t have the discipline to follow their plan.

It is hard to find the Truth when you start your search with a preconceived notion of what the Truth will be.
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Old October 31st, 2014, 07:12 AM   #9 (permalink)
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I always find argument such as "outperform[s] some of the world’s leading human fund managers” very disingenuous. People invest in funds to massively reduce their risk of catastrophic loss. It's not difficult to outperform funds in the short run, especially in a strong bull market.

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Old November 5th, 2014, 01:41 AM   #10 (permalink)
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Re Can you trade better than a rat.

Hello shodson,

Thank you very much for your follow up. It`s really helpful for me. I really appreciate you

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