Market Analysis System Using Actor Competence Measures
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Solution Overview
Problem
Existing market analysis techniques, such as fundamental and technical analysis, are subjective and fail to utilize all available information, leading to biased evaluations and incomplete analyses due to personal competence and interests of analysts.
Innovation Solution
A system and method for market analysis that computes competence and position measures for actors and instruments using historical transaction data, incorporating symmetry inversion to make percentage losses comparable to percentage profits, and weighing transactions by time, volume, or market value to generate reliable instrument-actor-specific indicators.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If fundamental analysis or technical analysis is used, then market analysis can be performed, but the analysis becomes subjective and biased due to analyst's personal competence and interests
Solution Approach 1:
The system uses algorithms to automatically compute competence measures and position measures without requiring human analyst judgment. The competence measure is calculated based on historical transaction data where the system evaluates actors' past performance objectively, and the position measure is derived from current transaction records, eliminating subjective bias while maintaining comprehensive analysis capability
Solution Approach 2:
The patent replaces manual analyst evaluation with automated computational systems. Instead of relying on human analysts to assess market conditions and instrument performance, the system uses computer algorithms to process transaction data, calculate competence metrics, and generate objective analysis results, thereby removing personal bias from the analysis process
2Loss of information
If traditional analysis techniques are used, then analysts can evaluate available data, but important information remains unused and analysis remains incomplete
Solution Approach 1:
The system serves multiple analytical functions simultaneously: it computes competence measures for actors, determines position measures for instruments, identifies trading opportunities, and generates comprehensive analysis reports. This multi-functional approach ensures that all available information from transaction records is utilized effectively, eliminating information loss while maintaining high analytical productivity
Solution Approach 2:
The patent introduces new analytical dimensions by calculating competence measures based on historical performance data and position measures based on current transaction patterns. These additional dimensions of analysis complement traditional fundamental and technical analysis, enabling more comprehensive evaluation of market conditions and instrument performance without sacrificing analytical efficiency
Data Source
AI summary
A method, data processor and program product, for performing an analysis of one or more instruments and/or one or more actors acting on the one or more instruments. In one embodiment a competence measure Cij is computed for at least one pair of instrument i and actor j; wherein i is an index which runs through the one or more instruments and j is an index which runs through the one or more actors; and wherein said computing the competence measure Cij of actor j on instrument i comprises maintaining a cumulative sell valueij and a cumulative purchase valueij respectively based on sell valuesij and/or purchase valuesij, and computing a value which is about equal to:(cumulativesellvalueij-cumulativepurchasevalueij)minimumof(cumulativesellvalueij,cumulativepurchasevalueij).