Tradingene could well be the future of trading, using algorithms that can invest cryptocurrencies to turn a profit. Business Chief caught up with Tim Seymour to find out why he feels algo-trading and blockchain technology are built to last.
Tim Seymour is a familiar face to many across the US as part of CNBC’s Fast Money show, a post-market program for investors, CEOs, traders and analysts which he has been involved with for over a decade.
Since 2007, Fast Money has been regularly broadcast across the US as well as in Asia. “The show follows the news of the day and gives the audience a chance to condense down a complicated, broad reaching trading day,” says Seymour. “It’s informative but fun; earnest in its approach without taking itself too seriously.”
Overall, Seymour boasts 19 years of experience in global and emerging market investment as a hedge fund manager and trader across multiple asset markets. At Fast Money, he is able to view markets through a global lens and focuses on political and technical analysis to look at trading and investment opportunities. “Clearly the best thing about being a part of the Fast Money team is the quality and breadth of the guests we chat with on a daily basis, from the world’s most powerful CEOs and hedge fund managers, to the brightest, off-the-run minds,” he adds.
Seymour has also been a managing partner at Triogem asset management, a hedge fund and wealth management firm, since 2008, and last year founded Seymour Asset Management, which offers wealth and investment management services for family offices and high net-worth individuals. “After over 20 years as a trader and fund manager where my clients were the world’s largest institutional investors, I wanted to work with a broader base of clients, using my experience across multiple asset classes and strategies to map out their financial culture.”
Now, Seymour is involved in a new venture – investment in the fast-moving cryptocurrency space. As of this year, he has taken on the role of investment advisor at Tradingene, a marketplace for trading algorithms. “At its core, Tradingene plans to create a new available financial instrument – trading algorithms.” On the platform, investors can not only choose but also adjust algorithms to fit their risk return preferences and pay developers only in case of positive returns. For algorithm creators, Tradingene is a good place to do all: develop, back-test and raise capital.
“By working with both investors and developers, Tradingene can set standards and benchmarks for algorithmic trading,” adds Seymour. Algo-trading involves programming machines to follow a set of instructions to trade in a way that will generate profit. Moreover, Tradingene uses machine learning technologies to enhance algorithm performance and show even better results.
Tradingene is launching a marketplace to allow investors to learn about algorithms, as well as evaluate and choose the most suitable method for their own portfolio. “Algorithms send signals to investors’ existing accounts at their broker or on an exchange, making the addition of algorithms to their portfolios simple and low risk,” says Seymour. “When co-founder Daniel Wolfe told me about the Tradingene platform and plans to make trading algorithms available to the broader investment community, I was very interested. Most investors are aware of the outsized returns being generated by the algorithm-driven funds, but what’s lacking is the capacity to build, back-test and implement algorithms in-house. Tradingene offers an elegant solution,” he explains.
While the idea of trading with algorithms may seem new to many investors, for Seymour the speed, efficiency and scientific approach of algo-trading makes perfect sense. “It’s clear that trading without emotion and according to a rules-based approach is something many investors can benefit from to improve upon their existing core investment themes and analysis,” he emphasizes. But is it time for humans to give way to machines altogether? “We do not believe all trading will eventually be exclusively algo-generated,” Seymour clarifies, “but there is significant scope for making algorithms a larger portion of the investment landscape.”
The rise of cryptocurrency
While algorithm trading goes on in the finance space, Tradingene’s use of algorithms to trade cryptocurrency is as new as the digital currency itself. While many were skeptical about the rise of Bitcoin, the technology behind digital tokens is doubtless here to stay, and popularity of ICOs and crypto investment hasn’t waned despite various regulatory issues. “Cryptocurrency is attractive to global investors for many reasons,” says Seymour. “First, for investors in economies with currencies less stable than the US dollar, cryptocurrency offers a way to protect savings from currency devaluation as well as a path to investing in assets.” Seymour is also of the opinion that blockchain platforms offer a welcome change from the traditional offerings of a stock exchange. “It seems to me that the decentralization at the core of blockchain is interesting to those worried about a repeat of the financial crises driven by large, centralized institutions on Wall Street and elsewhere.”
Investing in an ICO carries risk, but for Seymour it’s important to analyze the risk of any investment. “Any time investors begin to trade or invest in a new asset class there are risks. They may not understand all of the aspects of the instruments and the market they are entering. For those taking the plunge into cryptocurrencies, the risks are exacerbated by the incredible volatility in the markets.” He also points out that unlike the ‘closing bell’ CNBC reports on, crypto never sleeps. “Cryptocurrency trades 24/7, so investors can face losses even while they sleep. Algorithms never sleep so they can trade out of markets when they begin falling at any point.”
Blockchain – built to last?
As Seymour describes it, Blockchain is successful because it ‘cuts out the middleman’. “It is so popular because of its transparency, accuracy and cost reduction by cutting out third parties. Each transaction, or ‘block’, is recorded and transparent and then as the transaction is validated, it forms a ‘chain’ or network for approval. As the block is added to the chain, a permanent and transparent ledger is kept. We can see fund transfers and vote casting all happening with blockchain in the future.
“Of course, there are challenges ahead,” Seymour adds, pointing to regulatory issues and the complex technology involved. “But it’s the future – no doubt about that. Blockchain and cryptocurrency are going to change the world, especially the world of finance and banking. I am convinced that the transformative nature of blockchain will have a substantial, sustained and enduring impact on our world and that this will lead to the growing importance of tokens as a valuable, if volatile, asset class. I can see how whole industries – not least the financial services industry – will be disrupted, providing an opportunity for many to profit by finding ways to participate in the disruption. I can see, too, that this disruption will bring huge benefits to humans all over the world, particularly those who are underserved by financial institutions and lack access both to the basic financial instruments so central to modern Western life and to sources of capital to build and grow businesses.”
As investment advisor, Seymour is now on a mission to make algo-trading more commonplace. “My goals are to help popularize the use of trading algorithms as an investment product on the broader market, from hedge funds to family offices to individuals. I see Tradingene as the future of trading. Algorithmic trading is a game changer and investors will be drawn to its transparency and accessibility.”