Algorithms and Trading Systems based on Chess game strategies - page 2
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laplacianlab, thanks for sharing and be here, I do agree with you, but my idea was bring a way to prove the concept that this topic is valid.
The idea is: this meeting is not impossible and who knows with absolute certainty the results of this meeting?
Ok, a brainstorming.. You mean an imagination exercise. When they succeed in predicting the future in that meeting, then they will want to create the world's most powerful secret society... But they will soon realize that need someone able to implement the software they need, maybe Torvalds or Gates!
Ok, a brainstorming.. You mean an imagination exercise. When they succeed in predicting the future in that meeting, then they will want to create the world's most powerful secret society... But they will soon realize that need someone able to implement the software they need, maybe Torvalds or Gates!
Yes, but a brainstorming that leads to chess tactics and strategy ideas that we can code (rule 4 of the topic).
King: The economic collapse
Queen: The public debt crisis in Western countries
Rook 1: China's growth in the coming years
Rook 2: The social movements in Western countries
Bishop 1: The next mini ice age
Bishop 2: The influence in people of upcoming Austrian-School ideas
...
This is just one vision, my particular vision right now. But it's easy to define the mapping "piece -> event" according to what the Collective Intuition (MQL5 users, experts, etc.) think. This knowledge can be captured in a database through some surveys, games, etc. The objective is capturing the most relevant events in the world according to what the crowd believe, that is, the pieces of the game.
I think this approach is ok for FOREX (EURUSD, etc.) and commodities (Gold, etc.).
Ok, so I bring a specific idea. IMO, the pieces of this game are the most important events today.
King: The economic collapse
Queen: The public debt crisis in Western countries
Rook 1: China's growth in the coming years
Rook 2: The social movements in Western countries
Bishop 1: The next mini ice age
Bishop 2: The influence in people of upcoming Austrian-School ideas
...
This is just one vision, my particular vision right now. But it's easy to define the mapping "piece -> event" according to what the Collective Intuition (MQL5 users, experts, etc.) think. This knowledge can be captured in a database through some surveys, games, etc. The objective is capturing the most relevant events in the world according to what the crowd believe, that is, the pieces of the game.
I think this approach is ok for FOREX (EURUSD, etc.) and commodities (Gold, etc.).
The problem of this approach, however, is the mismatch that exists between the Collective Intuition and Reality.
The problem of this approach, however, is the mismatch that exists between the Collective Intuition and Reality.
laplacianlab, some time ago I created something similar, but associating chess pieces with indicators, like RSI, MACD, etc.
Maybe I'm wrong, and sorry to disappoint you, but IMO this kind of approach belongs to the utopian dream of creating an API to direct integrate chess and MT5.
For instance, Queen Sacrifice is a known chess tactic (I will describe it better in the next post).
"Possible reasons for a sham queen sacrifice include:
- a forced checkmate after the opponent takes the queen;
- more than adequate material compensation (say, a rook and two knights) after a forced continuation;
- clearing the way for a pawn's promotion to a replacement queen;
- the subsequent capture of the opponent's queen, resulting in some positional or material gain." - Source: Wikipedia
Now imagine you are Soros or Buffett, listening Kasparov and Carlson talking about tactical visions, possible reasons and variations about this tactic.
So, the point is: what ideas come from Queen Sacrifice chess tactic that leads to chess tactics and strategy ideas that we can code?
In chess, a sacrifice is a move giving up a piece in the hopes of gaining tactical or positional compensation in other forms. A sacrifice could also be a deliberate exchange of a chess piece of higher value for an opponent's piece of lower value. Source: Wikipedia
The Sacrifice Tactic: Applying this tactic in Trading Systems
When you open a trade using stoploss, you can adjust the stoploss, probably when prices are near break even, using a tactic named trailing stop.
But if the market moves to the opposite direction, i.e., against you, how you will react? Will change the stoploss? Will close (sacrifice) the trade?
If your trading system can detect a new market scenario, in a losing position, why don't close the trade and sacrifice, waiting for a new moment?
Another example of Sacrifice Tactic we can find in The Zurich Axioms (from Max Gunther), Axiom number three: when problems arise, sell quickly.
But the reality is that most of the algorithms, after sending an order with stoploss/takeprofit, will just wait one of this condition happens.
But if problems arise, like a trend change detection or a margin call risk, sometimes sacrifice the current position is a better strategy.
Some EAs in the old and good MQ championships had a kind of Panic Mode, that do this, since the EA could not be changed and some big problem was detected by the main algorithms.
About The Sacrifice Tactic: Applying this tactic in Trading Systems
Another example of Sacrifice Tactic we can find in The Zurich Axioms (from Max Gunther), Axiom number three: when problems arise, sell quickly.
But the reality is that most of the algorithms, after sending an order with stoploss/takeprofit, will just wait one of this condition happens.
But if problems arise, like a trend change detection or a margin call risk, sometimes sacrifice the current position is a better strategy.
Some EAs in the old and good MQ championships had a kind of Panic Mode, that do this, since the EA could not be changed and some big problem was detected by the main algorithms.
After your explanation I understand you better, so If you want I can give you my opinion.
Your game is very difficult. I personally do not see any practical use on a chess-based EA unless you code it just for fun. This is my humble opinion.
If you wanted your chess-based trading system to work, besides the chess pieces that I indicated, you should also look for the correspondences between the behavior and influence of the chess pieces among themselves on the chess table, and the economic events on the asset.
For instance:
"Diagonal movement of Bishop 1 on table A" -> "X movement of the mini ice age on Gold". Please, not that now I assume that you, the player, are the chart gold.
That would be something like a very, very, abstract homomorphism (but I don't know this!, I say this word homomorphism now, but a mathematician should help). I mean, the ADT Bishop should be equivalent to your new ADT MIA in order for you to move the Mini Ice Age diagonally 4 squares.
At this point, I think "the equivalence between the two things -original game chess and your new game-" is so diferent that interdependences among subthings are broken.
So in a nutshell:1. Your chess-based robot is a simple playful exercise, then no problem, you use the chess algorithms you want, observe results and share with us.
2. You try to identify a new set of game rules for your new pieces and think of it at a more abstract level.
I just found this curious news, maybe can help in some way break paradigms.
Good at Chess? A Hedge Fund May Want to Hire You
"Chess helps in trading, Mr. Weinstein said. To become a good chess player, he learned to focus on how he made decisions because he could not calculate the results of all his possible moves. Learning to deal with that uncertainty or risk has been useful. When you make an investment, "you can have an 80 percent chance of being right. And then the 20 percent comes up," he said. "But really it is the process that you used to make the decision."
Other games of strategy are prominent in finance. Warren E. Buffett, the chief executive of Berkshire Hathaway, is an accomplished bridge player; and David Einhorn, president of Greenlight Capital, who bet against Lehman Brothers in 2008, finished 18th in the main event of the 2006 World Series of Poker."
Quiet move
A quiet move is any move that doesn't result in a piece being threatened or captured.
http://www.chessgames.com/perl/chesscollection?cid=1006153
When traders are able to wait patiently for their goals, they are like positional chess players who seem to be losing their turn when, in fact, they're improving their position on the board.