Oftentimes when people hear about positif.ly, the first thing they ask is what they get out of it. Recently I came across a foreign exchange (FX) trader who didn’t want to hear a word about what positif.ly does and how before he got to the bottom of how it’d give him a leg up.
“Look, don’t waste your breath on technicalities. Just tell me, what’s in it for me?” he roared.
He was right. Technicalities are for technicians; users have different priorities. So instead of running through the technical reasons why positif.ly is the best thing on the face of the earth since chocolate, we decided to run a pulse with FX traders and see what’s really in it for them.
The setup is simple: We recruit a group of FX traders and ask them where they think the USD–CHF pair will trade by the end of the day and by the end of the week. Crucially, we also ask them how they think other traders would answer the same question. We can ask the same cohort of traders the same two questions regularly — say every week or every two weeks. This will give us much more fine-grained insights, but for now let’s just talk about a single pulse.
How much time do our respondents, in this case traders we recruited, have to answer the pulse? It all depends on how soon the client wants to act; the time horizon in the pulse, and how long we think is good enough for respondents to have the same information. For example, an hour is enough when pulsing for mid-day or close prices.
What happens next? People are motivated by money, competitiveness, social recognition, vanity or simply the drive to do the right thing. By asking respondents how they think others would answer the same question, positif.ly pits respondents against each other; thus, revealing on aggregate stuff they may have kept under wraps, if we’d simply asked them about they themselves think.
This is all clever and nifty. But what’s in it for our jaded trader?
Immediately after the pulse is complete, positif.ly sends the pulser three market signals: The dominant signal, the consensus and the surprise or uncertainty signal. These are not forecasts or predictions, positif.ly is not telling traders that prices will be here or there with some confidence. As a matter of fact, predictions are overrated as we’ll discuss in another post.
positif.ly goes one step further than mindless predictions like “There’s 60% chance USD–CHF will be above opening by COB”: It gives the trader the most unvarnished picture of what other traders in the market think about price movements. This is a superior source of information than analysts with no skin in the game or machines spewing chartist gibberish. The trader then builds a trading strategy based on the positif.ly signal and other information at his disposal. A smart trader would use positif.ly to elicit other traders’ trading strategies.
But I digress.
There’s also another benefit to using positif.ly. positif.ly is built on the fire-and-forget principle. Both running the pulse and managing respondents’ rewards are automated so pulsers can focus on the right pulses rather than being burdened with operational trivialities. Smart contracts come into play when respondent plausible deniability and reward integrity play critical parts in the pulse.
Want to see the pulse I discussed in this post? Log into your positif.ly account, switch to Pulses and import pulse “USD-CHF FX rating 27.02.2018”.