Breeding Rats to Trade Stocks
Scientist used competition / selection to breed rats adapted to better predict stock prices ( http://bit.ly/14usri ):
The first part of the experiment had to be the generation of so called ticker tracks; I used tick data from various futures and foreign exchange markets in order to generate sound in accordance to the real time price data…. The sound was modulated in correlation wih the price movement; if the price went up, the pitch went up, always depending on how strong the up-movement had been. When prices dropped, the following sound’s pitch got reduced depending on how strong the price had fallen….
Every day the rats were confronted with 100 different ticker tracks; the goal was to make them find out sound-patterns that humans are not able to recognize, and to predict the next market move after the last sound heard. ( I am currently working on a website to train humans too). Each time after listening to a sound, the rat had to choose between pressing either a green or a red button, green for “long” (if the prices were expected to move up), red for “short” (if they predicted a decline in prices). When they were right they received a small amount of food (the good rats became fat very fast) when they had taken the wrong button, they received a minor electric shock. Very soon it showed that some rats were doing outstandingly well: they developed a good ability to remember the patterns they were listening to; we needed them to react to real time data though.
Full article: http://bit.ly/14usri
via @cclaan
