There's a guardian angel for traders
Trading just got a lot less risky, courtesy of an innovative Israeli company which helps traders make better, and more efficient, decisions in real-time.
CPattern uses a unique technology-driven methodology to analyse traders’ behaviour and then directs the trader to the strengths and weaknesses of their trading style, prolonging their lifespan as an active trader.
It does this via its Guardian Angel tool — an automated guidance system offering “red warning flags” and “green lights” to traders in real time.
Oded Shefer (right), the founder of CPattern says: “Until today, trading was very lonely — there was noone to ask for help — and traders were wandering around in the dark. Many found themselves quitting trading after a few months with negative feelings.
“There are now options for traders today; such as automatic/robot traders that will trade for you to eliminate the psychological bias, and social trading, where traders don’t have to rely on themselves but can copy traders.
“Everybody is looking at ways to win the market in this industry and make the extra money. CPattern has spent past years developing a service that instead of analysing the market, analyses the traders behaviours.”
The CPattern “Guardian Angel” looks for hidden patterns in people’s trading. “The Guardian Angel might say: ‘Six out of your past 10 trades were successful but the four losing trades lost you more money than you one.”
The service is aimed at people who trade for a secondary income, or, as Mr Shefer puts it: “laymen traders. Many of these people will have a few lessons in trading, then open an account and make a deposit of anywhere between $100 and $10,000 and then start trading. But this trading could be very risky as when people look for quick wins, they also expose themselves to deep losses, because it is leveraged trading. So although you can make a lot of money in one minute, you can also make great losses.”
Founded a couple of years ago, CPattern is available to traders only via their brokers. It works with over a dozen worldwide brokers and marketing consultants, including YouTradeFX in the UK, Boston Technologies and AVA FX, and recently announced it is working with the popular MT4 platform.
Mr Shefer, who has an MSc in Industrial Psychology from the Technion Israel Institute of Technology, says: “The aim isn’t to tell traders what to do but to empower them to make better and considered analyses of their behaviour and trade.”
“We analyse their behaviour in real-time and come up with feedback suggestions while they trade.” The tool is integrated within their trading platform, so whenever a trader opens a trade, there is a small window where CPattern displays feedback messages telling traders things they should be aware of.
“We are monitoring what every trader is doing to help then understand risk and money management better, and also to better understand their decision making.” He adds: “We are trying to help traders overcome their psychological biases and help them become rationale, stable, mature, aware. We also provide indications about the market and market situations and we will alert the traders if there is likely to be a trading announcement that is likely to influence their trades.” CPattern also analyses the volatility of the market.
According to a sample of global 1,000 traders that use the Guardian Angel tool, they make an average of 45 per cent more trades than regular traders. “They survive trading much better.
“We also have indications that they are more successful. We see that GA users manage to trade more responsibility and don’t lose as much as regular traders. These are significant differences.”
Mr Shefer, 40, has over a decade of experience in leading complex technological projects both in the IDF and in large Israeli companies. He has served as a product manager in CogniFit, and has experience in developing sophisticated decision support tools, online psychological tests, and electronic learning systems.
The CPattern service is currently free for traders to use but there are plans to introduce additional premium paid-for services. There are also plans to develop it in other languages — it is currently available in English.
What about competitors? “I know of some groups trying to do a similar thing but have not shown the results that we have. We have the edge on the behavioural science that we use here.”