I Know First is a financial technology company that provides daily investment forecast based on an advanced self-learning algorithm. The system is a predictive stock forecast algorithm that is based on Artificial Intelligence (AI), Machine Learning (ML), and incorporating elements of Artificial Neural Networks and Genetic Algorithms.
That means: The Algorithm creates relationships between the different financial assets and is able to modify, delete and create new relationships. Based on the relationships and the latest market data, the algorithm calculates the forecasts. Since the Algorithm learns from its previous forcasts and is continously adapting the relationships, it is able to adapt quickly to changing market situations.
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Algo-Trading for the Individual Investor
1. Algo-Trading for the Individual
Investor
Algo-Trading’s place in a Sound
Investment Strategy
2. Algo Trading for the Individual
Investor
• Raw Speculation has always been anyone’s game
• Traditional tools and fundamental analysis is not a great answer to
compete with firms that use High Frequency Trading (HFT)
• Most traditional wisdom and tools are hard to use for a singular market
like a stock
Humans just can’t beat
High Frequency Trading
without an aid of their own
on a day to day basis!
3. Quantitative Trading
• The lesser known method of utilizing algorithm’s for trading
– The popular version is HFT, which dominated markets but is
marred in controversy and growing less effective
• Huge technological costs
• Curbed usage by law in E.U and Canada
• Quantitative trading uses its own set of mathematical
computer algorithms that:
– Analyze the structure of the market
• Identifies Trends
• Establishes Patterns
5. Machine Learning
• Machine Learning is a subunit of computer
science that focuses on Pattern Recognition
– Specific for forecasts!
• The hallmark is that it is Self Learning
– The Algorithm adds code that are consistent with
patterns found
– The Algorithm dumps the codes that are
unsuccessful www.iknowfirst.com
6. Neural Networks
1. Neural Networks
are inspired by a living
brain!
2. Each connection is
assigned a weight that
works with the input
to arrive at an output.
The Output is a
function of the inputs
and connections.
3. As a member of the artificial intelligence
community, Neural Networks update their
connections (the assigned weights within)
according to what works and what doesn’t work.
Historical Data
4. Sounds a lot like Optimization! The algorithm, after all, is one giant function.
7. Genetic Algorithms
• The glue that holds the theory behind the
algorithm together
– A search function which eliminates bad solutions
and pieces together new ones out of the ashes
Genetic Operators
Crossover Mutation
• Gives the algorithm the ability
to alter the data being crossed
over. It has to be controlled,
because it includes an element
of randomness.
• Combines the parent data
together and builds it into
a recognizably similar
solution
www.iknowfirst.com
8. Artificial Intelligence
• You can rely on good artificial intelligence
– Hospitals, Air control centers, Toy Companies, and of
course Investment firms do all the time
• Artificial Intelligence, almost by definition, is on
the up-and-up in the global market
• The Stock Market it the best place to apply
artificial intelligence because it receives
feedback a million times a day!
• I Know First’s algorithm is operational since
and already has of learning under
its belt! www.iknowfirst.com
9. Quantitative Trading
• Quantitative Trading gives off the best of both
worlds:
– Could be made fully automatic
– Could be a forecast with suggested put and call
orders
• Traders watch the market and place trades manually
• The Investors decide what to do with the
forecast!
www.iknowfirst.com
10. Quantitative Trading
• Every good portfolio stacks investments up with
counter-investments with curb losses (and gains)
Trade in USD Also trade in GBP
Hold interest bearing assets Hold assets with “static” value
Invest in Bank Stocks Invest in stocks in a different industry
Look for assets that would perform well in
a sudden downturn
Look for assets that would do well in a
sudden expansion
Hold stocks on the TSX Hold stocks in different global markets
Pick stocks based on emotion and gut-
feelings
Pick socks free of emotion and gut-
feelings- Algo-Trading!
www.iknowfirst.com
12. Algo-Trading Protection
• Our global world: Markets become more and more
integrated with each passing technological
advancement
• Stock Markets have always been interconnected
– Movements in one market affect all markets somehow
• Political events in Iran and Russia affect oil prices and
the E.U, which have a profound effect on the Canadian
economy which will harm the U.S economy…
• Algorithms quantify these effects and build them into
predictions, much more extensively than a human can
13. Algo-Trading with I Know First
• The
benefit of algo-
trading with
I Know First is
that our
algorithm is a
proven success
The overall I Know First return
in the one year period from
July 1st, 2014 to June 30th,
2015 yielded and overall
return of 83% while the
S&P500 rose by 5.2% during
the same period.