Math formulae to predict algotrading strategies?

I am delighted to offer the mathematics fans the possibility to freely download the latest version of my favorite indicator Belkhayate Gravity ( Ninjatrader platform). With this tool, they would be able to extract some harmony out of the stock markets chaos.

Ten years ago, high-frequency trading used to account for no more than 30% of overall global stock market transactions. Today it represents 65%, a share that will most likely exceed 85% in the future.

In other words, ultra-sophisticated and highly speedy robots are gaining control over the very short-term prices of virtually all financial products.

Not only is their intervention time measured in nanoseconds but, above all, their financial capacity exceeds by far that of 99% of traders and fund managers. Therefore, the only way to make winning trades is to be able to decode their intention and follow the movement they generate while keeping this absolute rule in mind: never resist them but always follow them.

This may seem unfair…that’s true. Many complain that it’s a sucker game ... but continue to trade in the same way and lose fortunes in the same way.

Things have changed now. Our opponent never panics and has no emotions. In a split second, it can analyze the order books of a thousand different markets and send more than 20,000 instructions with an execution order that takes into account both changes in the executed volume and the latest order book’s entries. This is practically another dimension!

Less than a second later, our opponent would have made a scan of the main mathematical models (Markov, Arima, etc.) on the series of all trades executed to decide what wrong track to put its competitors on.

The majority of traders are far from imagining the astronomical speed and the execution power algorithms have reached today.

But one thing is for sure: technical and graphic analysis is becoming a has-been. Traditional chart patterns (shoulder-and-head, ascending triangles, oscillators, moving averages, etc.) not only do not offer probabilistic advantages, but they increasingly generate false trails, which is worse.

The Eliott Wave and other Gann angles are no longer interesting indicators.

In short, the rules have changed and, every single day, those who refuse to adapt to them will give their money to these war machines. They will continue to say that there is no logic, that the markets "should" correct, that the euro can only fall, that it is just a matter of time.

I am always stupefied to see that big Swiss bankers and managers are still trading on the phone, like in the good old days!

Refusing to recognize this glaring truth means losing money: trading today and tomorrow means reading the order book on the very short term, decoding changes in the bid and ask volumes, detecting volumes that have not been executed but have been used to support the algotraders’ strategy.

It is still possible to earn money on a regular basis in trading. One should only and absolutely set up a method that takes into account the different strategies of algotraders. And once this method is defined, have the discipline and the patience to carefully apply it.

The Gravity Center and Algotraders

When I thought of calculating the Gravity Center of a stock market movement, my aim was just to try to find logic where there was none; far from imagining that, ten years later, I will discover that some algorithms "like" to wait until the gravity center is reached before they bombard the market with small slices of orders.

The aim is either to accumulate a position as discreetly as possible or to close out a position without drawing attention.

I let mathematicians discover by themselves the maneuvers of Algotraders around the gravity center. Is this a sheer coincidence? Is it mathematical?

The key to professional trading lies in execution. When an algo wants to "pass" 3200 slices, it can use an "iceberg", or a series of 100 slices at different levels, or make a "body swerve" like in football. There are as many algorithms as different human intelligences.

However, you will see that, at the level of the gravity center, there is a kind of consensus… one that we must learn to decipher.

We, humans, are intellectually and emotionally pleased when we start to perceive perfection and harmony. That's why we love music, painting, dancing, high-flying dives.

Welcome to the pleasure of discovering mathematical magic in the financial markets and the astonishing presence of the golden number at each impulse or even correction.

Enjoy the pleasure of discovering to what extent harmony controls the stock market chaos. It masters it, defines it and even limits it. Both philosophically and mathematically, it is fabulous to be able to grasp this truth that we fully trust although it seems inexplicable.

Because mathematical harmony governs the universe, it will always be superior to the stock market chaos, be it rigged or not. Hence the certainty that the well-trained human brain will always outperform algotraders.

The latest version of Belkhayate Gravity

The original version of the Belkhayate indicator calculates the gravity center of a stock market’s movement over a single unit of time to be chosen by the user (over an hour, a day or a week). The latest version features a powerful mathematical improvement that calculates and instantly puts on a chart the gravity center of the ongoing movement on six different time units!

An instantaneous look on the 6 dimensions helps understand the heart of the movement of commodities, currencies, shares, bonds or any other financial product.

I give free access to the codes of the two indicators (the original and 6D) to allow students to make comparison with other trend trackers but also and above all to introduce a mathematical or a functional correction.

This is a grain of sand that could create a butterfly effect towards the establishment everywhere in poor countries of R&D centers around the automated trading algorithms, both in public universities and private schools.

We, Africans, Arabs, south of Americans, Asians and Russians are good at mathematics and computer science. This is all we need to excel in this extremely promising area in the coming years ... without having to leave our families.

Mostafa Belkhayate

Free Download Belkhayate Gravity ( in NinjaTrader)