Has anyone tried Financial Signal Processing ?

jimshaw · Oct 19, 2009

Hi,

Has anyone tried services from Financial Signal Processing (http://www.fisig.com ) ?

I did not take them serious until I read news that person who will replace Jim Simon as co-heads of Renaissance have Natural Language processing background. (http://online.wsj.com/article/SB125503993951774475.html)

This trigger me to think that FiSig.com maybe doing something Renaissanceâs Medallion is doing.

What do you think ?

Jim

edbar · Oct 24, 2009

From what I see on their website, so far, they are only number crunching.

I don't see anything that I can apply to my robotic traders yet.

I'll check back periodically to see when they have a product.

Not counting them out YET@!

jimshaw · Nov 2, 2009

I believe their services are targeted for institutional investors, not for individual retail investors. They are dealing with natural language processing, extremely low signal noise ratio signal processing. Those are hard stuff. I am not sure if Renaissance Technologies uses similar stuff or not. If it does, then they might be on something interesting.

nitro · Nov 2, 2009

I always assumed things like this existed out there, but could never prove it. It is a logical consequence of using a computer to try to find "experts" that have a knack for leading the market.

Thanks for the interesting link.

Quote from jimshaw:

Hi,

Has anyone tried services from Financial Signal Processing (http://www.fisig.com ) ?

I did not take them serious until I read news that person who will replace Jim Simon as co-heads of Renaissance have Natural Language processing background. (http://online.wsj.com/article/SB125503993951774475.html)

This trigger me to think that FiSig.com maybe doing something Renaissanceâs Medallion is doing.

What do you think ?

Jim

jimshaw · Nov 20, 2009

It must be very hard to do, the good news is that, it is science and engineering, so someone can do it.

heech · Nov 20, 2009

Quote from jimshaw:

I believe their services are targeted for institutional investors, not for individual retail investors. They are dealing with natural language processing, extremely low signal noise ratio signal processing. Those are hard stuff. I am not sure if Renaissance Technologies uses similar stuff or not. If it does, then they might be on something interesting.

I'm reasonably sure these are completely different uses of pattern recognition technology.

FISIG has a "web crawler", which they claim can be used to identify information that shows trends in the greater economy (looking at shopping sites/discussion sites)... useful for some sort of fundamental analysis, assuming they could some how break this down into useful feature sets.

I believe RenTech is exclusively about using pattern recognition on price/volume action, and couldn't care less about what people were saying in chatboards. Their language/speech processing experts are using Markov chains to probabilistically match the current price action to some previously existing pattern they've identified.

jimshaw · Nov 25, 2009

If RenTec is about "pattern recognition on price/volume action", then why do they need those natural language processing experts ?

heech · Nov 25, 2009

Quote from jimshaw:

If RenTec is about "pattern recognition on price/volume action", then why do they need those natural language processing experts ?

Uhm, I don't know how to make my point any more clearly... other than just repeating the sentence, I guess:

"Their language/speech processing experts are using Markov chains to probabilistically match the current price action to some previously existing pattern they've identified."

See:

http://en.wikipedia.org/wiki/Stochastic_grammar

nitro · Nov 25, 2009

Quote from heech:

Uhm, I don't know how to make my point any more clearly... other than just repeating the sentence, I guess:

"Their language/speech processing experts are using Markov chains to probabilistically match the current price action to some previously existing pattern they've identified."

See:

http://en.wikipedia.org/wiki/Stochastic_grammar

I am curious, how do you know this?

heech · Nov 25, 2009

Quote from nitro:

I am curious, how do you know this?

I really don't have any inside knowledge. It's just an educated guess. My technical background in computer science touches on pattern recognition, and to a lesser degree natural language processing.

I think the above is the only reasonable explanation I can come up with, for how natural language processing could be applied to the markets.

Trying to intelligently parse/interpret someone's spoken speech (like when you talk to an automated phone system) is similar, in many ways, to trying to interpret whether the markets are going up/down on the short term. Did they mis-speak that syllable? Is it more likely that syllable belong to the previous word, or is it a new word? Is this a new sentence?