LAPLACE Trade Agent Series 3

Statistical analysis, market profiling and natural language processing is combined in our LAPLACE trade agents for Forex, which are capable of analysing rates and news feeds, deciding which asset to buy and sell, and devising their own strategies – all in real-time.

More than algorithmic trading: The auto-pilot for the trading industry

As event-driven trading styles become increasingly important to the financial industry, reflected by growing capital allocations, fund managers are urgently looking to structure, standardize and finally automate at least parts of the trading process.

Today, the most advanced trading software packages offer a few means of automating trade execution, frequently referred to as “trade automation” or “algorithmic trading”. Nearly all these trade automation functions are based on mere speed of order execution. By no means, algorithmic trading is an auto-pilot for the trading industry. While automation of routine tasks decreases the stress level for the human trader and risks of errors during high-stress situations in very fast markets, it is yet obvious that automation merely offers support functionalities, while financial performance still depends heavily on the trader himself.

In contrast, LAPLACE trade agents for Forex belong to what is being called autonomous self*-systems. Using multi-agent architecture as carrier, each LAPLACE trade agent executes a continuous time closed-loop control cycle.

• Analyzing the market situation.
• Assessing the market situation and its potential impact on a specific asset.
• Optimizing a trading decision to make use of a market situation.
• Executing appropriate actions.

In contrast to conventional algorithms, LAPLACE calculations are not a one-shot investment suggestion. Instead, LAPLACE continuously monitors the market as well as the effects that its previous decisions may have on its account. At any point in time, the system is completely aware of the impact its decisions will have and controls and corrects its decisions as future unfolds.

Information Pre-processing – LAPLACE features spotter agents monitoring price and news feeds. Raw data are being cleaned up and pre-processed for information extraction.

Market Assessment – LAPLACE merges spotter information into a holistic market picture and evaluates if a market move is a relevant event to become active. As reaction, LAPLACE will either make a sell or buy decision.

Position Management and Accounting – LAPLACE monitors the evolution of its open positions actively and 24/7. Supportive monitoring activities are being executed by our Intelligent Execution System IES that provides infrastructure monitoring to ensure high availability of real-time streaming rates.

Exit Management – At the event of a relevant market move, stop loss and limit orders are being dynamically calculated and adapt dynamically when market dynamics change during runtime.

Money Management – LAPLACE trade agents allow improved capital efficiency through scaling functionality as well as integration with our money management component CALOC.

Systematic Adaptability – LAPLACE over time adapts to changing market dynamics. To re-calibrate LAPLACE, we offer a structured re-calibration process following mathematical convergence criteria to ensure that LAPLACE’s statistical footprints remains intact.

Agent Governance – LAPLACE are being governed and configures through an Agent Management System and a networking component that allows the user graphically – by drag-and-drop – defining and managing its network of trade agents.

Logging – LAPLACE logs each market event, its market perception, dealing activities and dealing results during its active hours. Logs serve for reconciliation through the Operator and for legal purposes.

LAPLACE characteristics

LAPLACE series is available for major currency pairs:

• Fully event-driven by the market dynamics.
• Learning how to behave in a certain market.
• Adaptive to market changes.
• Fully autonomous from city trader.
• Trainable on other currency pairs.