In a world where algorithms rule, Bloomberg is promising to give the simple human a leg up through the launch of a trader brain exercise tool that helps users sharpen the skills they need to predict short-term price movements.
Bloomberg Tradebook has teamed up with risk and trading psychology outfit The ReThink Group on the tool, which consists of a series of videos that depict the movement of shapes. Traders must study each scene and then anticipate the direction of the shapes' next move.
The ability to do this successfully correlates to the trader's skill in predicting short-term movements in price, claims Bloomberg, which has based the tool on a study called Exploring the Nature of 'Trader Intuition', which looked at how uninformed traders infer information from the trading process.
The study, published in the Journal of Finance in 2010, found that the skill in predicting price changes in markets is more strongly connected with Theory of Mind, or human capacity to discern malicious or benevolent intent, than mathematical skill.
Glenn Lesko, CEO, Tradebook, says: "While technology plays an important role in seeking best execution, achieving this ultimately depends on the skills of an individual trader. This exercise builds on Tradebook's mission to empower buy-side traders by helping our clients hone their core skillset in an innovative way."
Denise Shull, founder, The ReThink Group, adds: "By stimulating the parts of the brain responsible for predictive ability, the exercise is helping traders to sharpen the skills associated with high performance without the pressure of executing real trades."