Researcher Uses Computer Model Of Soccer Fan Crowd Behaviour To Model Trading Patterns Of Stockbrokers

July 10, 1996

The trading patterns of city stockbrokers have a lot in common with the behaviour of crowds of football fans according to University of Warwick Mathematics researcher Keith Still. Keith has developed some revolutionary mathematical tools using a part of Chaos Theory called Orchid Fractal Analysis that provides extremely accurate models of how crowds behave.

Using this technique he and his company FMIG Ltd have also developed software for Wembley Stadium to assist in the management of all the major events held at the stadium, from FA cup finals to pop concerts.

Keith soon realised that the techniques he was employing to model crowd control at a football stadium could also be used to model the behaviour of a crowd of stockbrokers. A Los Angeles financial analyst telephoned Keith after seeing a US television programme on his crowd management software, he put to him the idea - "If you can do it with crowds - what can you do with this." He then handed him four disks of currency data on Dollar - Yen transactions (transaction by transaction) for 1994/1995. Keith applied the same techniques as he used for crowd management to this Dollar Yen data.

"I could not believe it at first. . . . it could not be that simple. . . . but the results speaks for themselves - Without really trying - the traces were predicting 40,000 transactions ahead of the data"Keith is now in talks with some potential US investors in his stock market analysis techniques. His company is also looking at applying the same techniques to solve problems in data encryption.

University of Warwick

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