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Control our Emotions! Print
Written by Site admin   

 

Time for a breather
 

JUST before the hovering finger clicks the mouse to trade, there is one thing that online investors of the future might want to check: their “Rationalizer”. The device, a prototype of which was unveiled this week, is an emotion-sensing system designed to help investors keep a cool head when buying and selling.

emobowl

The idea was dreamed up by Philips, an electronics group based in the Netherlands, and the Dialogues Incubator, an initiative sponsored by ABN AMRO, a Dutch bank with intimate experience of rash decision-makers. Philips has been exploring emotion-sensing systems for a number of years, in part to see how electronic devices might help people cope with stress.

ABN’s interest stemmed from research showing that day-traders who exhibit more intense emotional reactions to monetary gain or loss also have significantly worse trading results.

The Rationalizer, which is still under development, consists of a bracelet that measures something called a galvanic skin response. This is a change in the electrical resistance of the skin which can be caused by various stimuli, like anger or elation. It cannot determine if the emotional arousal is negative or positive, only that it is happening.

The bracelet transmits its measurements to the “EmoBowl”, a saucer-like object which displays a moving light pattern to illustrate the user’s mood. If the person becomes emotionally aroused, the light pattern becomes more intense and turns from a soft yellow to orange. By the time it reaches a deep red, the makers reckon, it might be wise for an online trader to take a break and cool down. If only it had been available to deal with those crazed bank traders back in 2006-7 but I guess if it had, they'd have just switched them off!

 

From the blog

Next Wednesday, up they go again...

The consensus is the Federal Reserve, at it's June FOMC meeting Wednesday 13th, will confirm the next US interest rate increase, from 1.75 to 2%:

The consensus, 'dot' plot and forward guidance is as plain as day. But, today, the bond market just had a hissy fit...

The standard 30 year US T Bond has been tumbling down this year. Interest rates do the opposite of course, moving on up as bonds slide. But just look at the chart. The chart bottomed on May 18th, rallied then tumbled again, until today, June 7th.

The 4 hour chart shows a major key revesal day, lower early in the day then higher than yesterday. Key reversals (or the candle version, Bullish Engulfing) are one of the strongest one day signals in the market.

What does this mean?

Maybe nothing more than traders liquidating their previous short position profits, just in case something unexpected comes out of the Fed minutes.

Or - the market just got the idea the Fed will change it's mind and delay the increase. The dollar will tank and stock markets will soar even higher. Stranger things have happened, just when everyone least expect it.

 

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