so I’m laying in bed watching Netflix
when my Apple watch haptic feedback taps
me on the wrist expecting a text
notification I turn my wrist the
notification red take 10 seconds to
breathe which I probably should do right
now it kind of surprised me that an app
was telling me to relax and breathe but
ultimately it brought to light the Apple
was tracking my heartrate and an attempt
to put that information to context for
me you know it’s amazing how fast
wearable technology is growing
specifically thinking about ways we can
utilize data to help really our
decision-making in our lives so since
high school I’ve always had the urge to
make money whether it was buying and
selling things on ebay working in a
coffee shop or even just waiting tables
my father’s restaurant none of that
really seemed satisfying to me until one
day a group of other friends were
stacked about the amount of money they
were making in the stock market
some of them investing a couple thousand
dollars making thirty to fifty percent
of their money in a matter of months
this is clearly a lot more than like a
couple hundred dollars I made in a
coffee shop so the following day I ran
two borders eager to learn about the
stock market bought a bunch books sat
down and read out all these different
books on different financial instruments
one of the many books I read was called
reminiscence of a stock operator which
tells the story of a young trader
pursues his career on Wall Street and
describes his experiences both positive
and negative when it came down to the
the book is set in the early 1900s when
trading was all in paper form and he
relied solely on a ticker tape for all
of your information this stuck out to me
because technology had obviously
obviously changed drastically since then
considering how we trade today using
online discount brokers and trading
platforms all the way how we speculate
the news and fundamentals of a
some of the many things that I learned
from that process was that trading was
ultimately was really learning about how
his emotion really affected a lot of the
decisions he made we’re all exposed to
our emotional vulnerabilities I first
opened up a trading account when I was
18 and boy was that excited first thing
an eager young inspired ambitious
teenager things when they get access to
stock market is this idea of making a
ton of money off of some company just a
research on I can assure you that was
not the case at first it felt like I
would buy and sell stocks like throwing
a dart at a bull’s eye blindfolded in
fact in first six months I’d lost all
the money on invested by trading to
often to emotional
first person I told which some of my
friends wouldn’t be surprised me telling
my mother that I’d lost all my money
she responded with well that sucks maybe
shouldn’t pull you all your eggs in one
basket you know what she was right it
really did suck I mean when you’re 18
$2,000 really meant like I’d lost
everything however I someone enjoyed the
thrill treating the market like a casino
it really taught me a lot of different
lessons of how my own emotion was
influenced by these different factors
news and technology so given this task I
mean four years later I still you know
I’m learning you’re always constantly
learning so this year I’ve had obviously
a design thesis for my fifth year and
given this struggle I decided to say hey
let’s go research behavioral finance
which boy is a huge topic so based on my
past experience I love this quote it
says investing isn’t about beating
others at their game it’s about
controlling yourself at your own game
so thesis increase starts with a
question you ask yourself a question as
a starting point for the direction you
wish to pursue so the question I asked
here was how do we help investors better
their investment decisions by bringing
awareness to their behavior after
identifying this thesis inquiry I set
out to conduct research on behavioral
finance reading articles collecting a
ton of literary review to figure out
what direct
the design would need to take and what
is that opportunity gap so the cycle of
market emotions which describes a lot of
the emotions an investor may experience
starts with understanding that the April
finance is really influenced by
psychological factors like mood emotion
and cognitive biases so an investor may
experience all these emotions but in my
research I chose to focus on the
emotions that had the most impact on the
decision-making process for example
optimism set ourselves with a positive
outlook and set goals for reasons why we
choose to invest whether it’s for
long-term retirement buying a new car or
even paying for a vacation along that
emotional journey many experience
euphoria where where investors are in
our selves a high risk this is investing
in a stock that continuously Rises
without thinking about possibility that
it may inevitably retreat it’s sort of
how sheep herd together until pack of
wolves come along and everyone goes
running in fear the next most common and
key emotion is anxiety we all experience
anxiety again I’m maybe experience like
anxiety pushes investors to lose about
3% per year but it’s good to mention
that anxiety doesn’t actually push the
decision choice which brings me to fear
when we’re afraid it’s the fear that
ultimately pushes us to sell pushes us
to make that decision
you know if I’m moderately afraid or
moderately anxious we tend to self
reflecting off self-reflect and I’ll
evaluate myself which will help me to
prevent myself from make an irrational
decision well if those anxiety levels
are really high then when you have a
higher chance of making an irrational
decision so after doing all this
behavioral finance research I still
didn’t feel confident I knew the
direction the research needed to take to
still solve that initial inquiry this
feeling of complacency lasted about
three weeks until my friends and wot and
I went down towns cafe cueball and you
wouldn’t have guessed what it happened
that day
just by chance I glanced over to a table
nearby and I noticed an article in the
New York Times that said measuring gut
feelings in the market coincidence New
York Times article talked about a theory
developed by a traitor named John Coates
who recently became a researcher at
Cambridge University and him and his
team were studying the theory that
investors were having gut feelings or
being successful by having gut feelings
about their traits
I mean after finishing this article you
could tell me I’m super nerdy I ran out
of there with that article super stoked
that I knew other researchers were
researching this topic I hit Google and
I looked into what published on their
research and the title I found was
called interoceptive ability survival on
a London trading floor so what is
interoception I had no idea then
interception is the sensing of
physiological behaviors that originally
inside our bodies like hunger Cain and
Hari
now individuals in this case I have a
higher sensitivity to those interceptive
signals tend to perform better and risky
decision making so study as I read
further I learned that they took 18
traders engaged in high-frequency
trading
so essentially what that meant is that
they bought and sold futures contracts
for a short period of time this type of
trading requires an ability to
assimilate a lot of information that
flows through multiple different feeds
then identifying those price patterns
and making a larger risky decision the
study conducted was to measure the
differences in a traders ability to
detect their interceptive signals
through something heartbeat detection
task so the task for the trader was the
silent account without touching your
chest or your pulse point see how many
heartbeats they could count in a
specific time interval the researchers
would then compare that with their
actual harpy so in an attempt to test
their hypothesis that the interoceptive
accuracy predicted trading performance
they pulled the data of their daily
profit
loss over the previous year and they
found a few significant conclusions
that’s one was that the traders who had
better harpy protection scores were in
fact more profitable traders the second
is that our heartbeat detection ability
actually increases during stress which I
found pretty significant and the third
was that their control group who were
non trading interval individuals had
lower scores than the traders so like in
trading in other professions people are
more successful are more in control and
tend to do even are even more successful
than beginners so I said maybe the
opportunity gap here is the is to take
this data and show it to the traders and
what if we tested this theory on a
larger set of traders not just 18 but
all of Wall Street so the criteria to
design for here are as follows it’s
heart rate variability which they proven
works as a metric to design for market
volatility for overall context and then
trading activity which would act as buy
and sell behavior so set out to mock up
some of my design in the initial
prototype that’s currently in
development will allow for the use of
current rebels on the market my goal
with that is that I want to make this
tool accessible wearables are pretty
accessible on the market right now and
well-known so that experience is
familiar it’s only that we want to
monitor this data in the most less
intrusive way as possible so heart rate
variability we tracked the background
while the software front end would act
as a self reflection tool for the trader
where they can upload their information
and then identify patterns of their own
but instead of it being patterns about
their investment it’s more patterns dear
towards their behavior we dive deeper
into this conceptual age which is really
messy I urge every wanted to think about
how different applications different
technology is really influencing our
behavior for better and worse and to
really think about you know not just
high-stress profession
think about technology like social media
and applications we use every day on our
cell phone how those apps are making
it’s more addictive I mean the most
common one that relating with sip you
knows recently is Instagram think about
how many likes you get think about even
how excited you are when you get more
likes than expected another recent one
which my brother is told me about is
continuing a snapchat streak with your
friends I mean you you have to do that
you have to continue it with your
friends is that that necessary but I
mean think about I challenge everyone
today I think of new ways that you can
create technology new ways to create
applications that can make us improve
our decision-making improve our
productivity most of all our health
thank
[Applause]
you [Applause]