[
  {
    "i": 0,
    "speaker": "Speaker 1",
    "text": "I've realized something about trading."
  },
  {
    "i": 1,
    "speaker": "Speaker 1",
    "text": "Average people who are trying to do day trading, even all the way up to professionals doing trading, they do it completely different than how hedge funds do it. Now, I want to tell you"
  },
  {
    "i": 2,
    "speaker": "Speaker 1",
    "text": "something that I've learned recently that completely shattered my view of trading. And that is that quants are not using trend lines and indicators on a chart to make their decisions. And you"
  },
  {
    "i": 3,
    "speaker": "Speaker 1",
    "text": "might be thinking, well, how on earth do you do it then? Well, that's exactly what I'm going to show you in this video. In the depths of trading Twitter, I found a thread by a person called"
  },
  {
    "i": 4,
    "speaker": "Speaker 1",
    "text": "Rowan. He is a quant. He makes tons of money as a quant. And he's laid out on the table all of the secrets that these hedge fund quants use that get them the results that they do, which outperforms"
  },
  {
    "i": 5,
    "speaker": "Speaker 1",
    "text": "your normal trader and is far more consistent but significantly more complex. I've gone through all of his work on what's called the hedge fund method and I've simplified it into a"
  },
  {
    "i": 6,
    "speaker": "Speaker 1",
    "text": "single video and that's what you're watching today."
  },
  {
    "i": 7,
    "speaker": "Speaker 1",
    "text": "So, in this video, I'm going to give you a few things. Number one, I'm going to share exactly what the hedge fund method is. Number two, I'm going to convert all of that hedge fund method into a format"
  },
  {
    "i": 8,
    "speaker": "Speaker 1",
    "text": "that is understood by AI. And then third, I'm going to give you an exact copy and paste prompt that you can put into your clawed code or any LLM right now and have this whole method installed"
  },
  {
    "i": 9,
    "speaker": "Speaker 1",
    "text": "into your own trading strategies. And if you're using clawed code, you can use this prompt as a skill in your AI. So anytime you have a new strategy, it will automatically apply this method on top"
  },
  {
    "i": 10,
    "speaker": "Speaker 1",
    "text": "of it. And by the end of the video, you'll have all the tools necessary to operate like a hedge fund quant. And right after you subscribe, let's get into it."
  },
  {
    "i": 11,
    "speaker": "Speaker 1",
    "text": "In this video, we're going to go over the 10 elements that make up the hedge fund method. And after all of that has been explained, I'm going to give you a couple of prompts. One is going to be to"
  },
  {
    "i": 12,
    "speaker": "Speaker 1",
    "text": "install this onto your Claude code or any LLM that you use. And the other one will be a visualization that you can put onto your Trading View chart using Pinescript. I want you to know that"
  },
  {
    "i": 13,
    "speaker": "Speaker 1",
    "text": "these prompts are entirely free for you to copy and paste and take. I don't even want your email. You can find those prompts on my GitHub link in the top line of the description."
  },
  {
    "i": 14,
    "speaker": "Speaker 1",
    "text": "The first thing to understand is that these hedge funds and the quants are not operating using the same data that you and I are. I think for the most part you and I go on vibes kind of like feeling"
  },
  {
    "i": 15,
    "speaker": "Speaker 1",
    "text": "our way around the investing like I've got a good feeling about Bitcoin or I've got a good feeling about Palunteer and it's all about feelings. Quants and hedge funds do their absolute best to"
  },
  {
    "i": 16,
    "speaker": "Speaker 1",
    "text": "quantify these feelings actually put numerical values to them. And it's a bit like going outside and saying, \"Oh, it's windy today. I'm going to make this decision as a result. Whereas if a quant"
  },
  {
    "i": 17,
    "speaker": "Speaker 1",
    "text": "or a hedge fund went out there, they want a numerical value. How strong is the wind? What direction is it pointing?"
  },
  {
    "i": 18,
    "speaker": "Speaker 1",
    "text": "And then with those numbers, they can make decisions. So I want to introduce to you something called states. Every hedge fund and quant will operate with these states. There are only three"
  },
  {
    "i": 19,
    "speaker": "Speaker 1",
    "text": "states. There is a bull state, a sideways state, and a bare state. Now a bull state is defined as the last 20 days. When you add up all of the returns of the last 20 days, are they at 5% or"
  },
  {
    "i": 20,
    "speaker": "Speaker 1",
    "text": "more return? For example, if you had a 1% gain every single day for 20 days, that would represent a 20% gain and obviously would be in a bull state. If you had 15 of the days as a 1% increase,"
  },
  {
    "i": 21,
    "speaker": "Speaker 1",
    "text": "but five of the days were a 1% decrease, then overall you would have a 10% gain over that 20-day period, which would again match the criteria for a bull state. Now if the last 20 days were a"
  },
  {
    "i": 22,
    "speaker": "Speaker 1",
    "text": "negative 5% or greater meaning -5 - 6 so on and so forth then that would be classified as a bare state and anything in between is a sideways state. I know this sounds very elementary but wait"
  },
  {
    "i": 23,
    "speaker": "Speaker 1",
    "text": "until you see how they use this information. And so the next step of the process is obvious. We need to figure out what the state is currently. What is today's state? And so what they do is"
  },
  {
    "i": 24,
    "speaker": "Speaker 1",
    "text": "they go back over the course of the entire asset history. Let's say it's Bitcoin. And they actually run an algorithm for every single day of the history of Bitcoin and label each day"
  },
  {
    "i": 25,
    "speaker": "Speaker 1",
    "text": "with its state. So, if you can imagine now, you've got the entire price history of Bitcoin or any asset. And every single day starting from the 20th day cuz that's the first time you actually"
  },
  {
    "i": 26,
    "speaker": "Speaker 1",
    "text": "have a 20-day looking back period all the way through to today has a label."
  },
  {
    "i": 27,
    "speaker": "Speaker 1",
    "text": "And each day is a specific state. And this brings us to the third rule that they use as part of this hedge fund method. And it's something called the mark of property. And it's this whole"
  },
  {
    "i": 28,
    "speaker": "Speaker 1",
    "text": "idea that the market only moves to the next place as a result of where it is today. And this goes completely against the way that traders view things. They kind of look back throughout history and"
  },
  {
    "i": 29,
    "speaker": "Speaker 1",
    "text": "try to determine what's going to happen tomorrow. But the Markoff property focuses solely on today. So let me give you a bit of an analogy. Let's say you're driving from Little Rock,"
  },
  {
    "i": 30,
    "speaker": "Speaker 1",
    "text": "Arkansas all the way up to New York City. The route you take to get to New York City will entirely depend on the starting location. This might sound very obvious, but let me make it even"
  },
  {
    "i": 31,
    "speaker": "Speaker 1",
    "text": "clearer. The way you get to New York City from Little Rock, Arkansas, is not the same way you get there from Nebraska. And it goes without saying that as you make your way on that journey, let's say you get to Ohio, for"
  },
  {
    "i": 32,
    "speaker": "Speaker 1",
    "text": "example, the journey to get to New York City from Ohio is also different. The journey to New York from Ohio is entirely unique. It doesn't matter at all that you started in Little Rock if"
  },
  {
    "i": 33,
    "speaker": "Speaker 1",
    "text": "you're in Ohio trying to get to New York. I hope I've made that quite clear."
  },
  {
    "i": 34,
    "speaker": "Speaker 1",
    "text": "To summarize, the past doesn't really indicate where the future is going to go. And you might be thinking, \"Well, Lewis, didn't we just do like the 20-day thing back in history throughout the"
  },
  {
    "i": 35,
    "speaker": "Speaker 1",
    "text": "whole history of Bitcoin? Why would we do that if the past was irrelevant?\" And maybe I was a bit extreme there, but the Markoff principle really is looking at today. Today has the most weight. And it"
  },
  {
    "i": 36,
    "speaker": "Speaker 1",
    "text": "brings us to this thing called the hedge fund matrix, which before this video, I had no idea this thing exists. And it makes all the sense in the world. And it brings everything we've talked about"
  },
  {
    "i": 37,
    "speaker": "Speaker 1",
    "text": "already together. Now, with all that data that we've got from the entire history of Bitcoin, there are moments in time where the state shifts. So we might go from a sideways market to a bull"
  },
  {
    "i": 38,
    "speaker": "Speaker 1",
    "text": "market or a bull state and we might go from a bull state to a bare state and each one of those transitions is counted and logged. So what they do is is that they look back in time at every time"
  },
  {
    "i": 39,
    "speaker": "Speaker 1",
    "text": "that transition took place between a bull and a sideways market for example and they tally them all down. So we have now a complete record of the transitions that have occurred and how many times"
  },
  {
    "i": 40,
    "speaker": "Speaker 1",
    "text": "they occurred. So, the amount of times we went from bear to bull, bull to bear, from sideways to bull, sideways to bear, bear to sideways, bull to sideways, every single combination, we've now"
  },
  {
    "i": 41,
    "speaker": "Speaker 1",
    "text": "tallied them all down. And we can put a numerical value on the amount of times that it happened. Now that we've got those counts and that tally, we can turn them into percentages. And that brings"
  },
  {
    "i": 42,
    "speaker": "Speaker 1",
    "text": "us to this very simple 3x3 grid. And it's kind of difficult to explain, so I'm going to show you on screen right here. What you're seeing on screen are three rows that represent today's state."
  },
  {
    "i": 43,
    "speaker": "Speaker 1",
    "text": "The three columns represent tomorrow's state. And every row has to add up to 100% because something does have to happen tomorrow with 100% certainty. The market does have to end up in one of"
  },
  {
    "i": 44,
    "speaker": "Speaker 1",
    "text": "those buckets. And so you'll notice that there is a most probable outcome for tomorrow's price. And this is where we get the whole concept of the trend is your friend. If you're in a bare state,"
  },
  {
    "i": 45,
    "speaker": "Speaker 1",
    "text": "the most likely outcome for the next day is also going to be a a bare state, but it's not 100% certain. There are other outcomes that can take place. But the hedge funds and the quants are"
  },
  {
    "i": 46,
    "speaker": "Speaker 1",
    "text": "specifically using probabilities to determine what the next day's moves are."
  },
  {
    "i": 47,
    "speaker": "Speaker 1",
    "text": "And that's moving and progressing every single day as it looks back at all those transitions, all the tallies, and all the probabilities that they can see what the outcome of the following day is most"
  },
  {
    "i": 48,
    "speaker": "Speaker 1",
    "text": "likely to be. So you'll see on the screen right now that we have a diagonal line of cells running from the top left to the bottom right. And these three cells represent the market staying"
  },
  {
    "i": 49,
    "speaker": "Speaker 1",
    "text": "exactly the same. That would be like bull state into bull state, bare state into bear state, sideways into sideways."
  },
  {
    "i": 50,
    "speaker": "Speaker 1",
    "text": "And the reason I highlight this diagonal is because it shows something called persistence. And that persistence brings about a word called stickiness. And every state has a stickiness score"
  },
  {
    "i": 51,
    "speaker": "Speaker 1",
    "text": "essentially. How sticky is a bull market? Well, if we are in a bull state today, accounting for the last 20 days, it's more likely for it to be another bull state tomorrow than it is any of"
  },
  {
    "i": 52,
    "speaker": "Speaker 1",
    "text": "the other states. Bull states tend to be quite sticky states. And also, bare markets do as well. And so, at all times, there's a live matrix scoreboard determining the likelihood of the"
  },
  {
    "i": 53,
    "speaker": "Speaker 1",
    "text": "outcome of tomorrow. And this is what the quants and the hedge funds use to determine where to place their bets today. So if you know that the stickiness score of a bull state is 80%"
  },
  {
    "i": 54,
    "speaker": "Speaker 1",
    "text": "for example, well then you can quite easily hedge your bets on tomorrow also being a bull state and as a result going long. They're not saying tomorrow will be a bull state. They're saying there's"
  },
  {
    "i": 55,
    "speaker": "Speaker 1",
    "text": "an 80% chance there's an 80% probability that it will be a bull state tomorrow as well. And just to make this super cool and amazing for you, I've actually created a pine script for an indicator"
  },
  {
    "i": 56,
    "speaker": "Speaker 1",
    "text": "that shows the matrix on a chart that you can use right now. So, when we get to the tutorial element of this video where I explain how to do it, I'm going to show you exactly how to install this"
  },
  {
    "i": 57,
    "speaker": "Speaker 1",
    "text": "Pine script into your Trading View. And you can see this 3x3 matrix on your chart for any asset you want. How cool is that? I think it's about time to subscribe, don't you? So, to summarize"
  },
  {
    "i": 58,
    "speaker": "Speaker 1",
    "text": "what we've covered so far, we've talked about what is a state, so we know what the states are. We've also decided today's state. That's the calculation that the hedge funds do to determine"
  },
  {
    "i": 59,
    "speaker": "Speaker 1",
    "text": "where we are today based on the last 20 days of movement. We've talked about the markoff property. That was number three."
  },
  {
    "i": 60,
    "speaker": "Speaker 1",
    "text": "Number four, we've talked about this transition matrix here that the hedge fund is using by that 3x3 grid. And number five, we talked about this persistence, the diagonal line that I"
  },
  {
    "i": 61,
    "speaker": "Speaker 1",
    "text": "showed you there, the stickiness score of the asset. But number six is kind of an interesting move which I never expected. And it is what if we don't just want a one day forecast? What if we"
  },
  {
    "i": 62,
    "speaker": "Speaker 1",
    "text": "want to look further in the future? How do we use all this mathematics and all the and all the information we've gathered so far to determine a more far-reaching prediction of the future?"
  },
  {
    "i": 63,
    "speaker": "Speaker 1",
    "text": "Well, there actually is a calculation for that, and I'm going to show you. And it's something called squaring the matrix. The great thing is is that you don't need any new mathematics. You've"
  },
  {
    "i": 64,
    "speaker": "Speaker 1",
    "text": "already got it already. So, all you have to do is simply multiply the matrix by itself. So, if you want a 2-day matrix, you square the matrix by itself. If you want a three-day forecast, you cube it"
  },
  {
    "i": 65,
    "speaker": "Speaker 1",
    "text": "against itself. And don't worry, I'm going to show you an example of this with real numbers. But it goes on and on and on depending on how far away you want that prediction. And of course, as"
  },
  {
    "i": 66,
    "speaker": "Speaker 1",
    "text": "you keep squaring and cubing against yourself, the number ultimately of percentage, the probability percentage is going down over time. So let's do a three example and I think by the end of"
  },
  {
    "i": 67,
    "speaker": "Speaker 1",
    "text": "this you'll understand it. So path number one would be like going from bull to bull. So from the example we used earlier, there's an 80% chance that if we are in a bull state now, it will be a"
  },
  {
    "i": 68,
    "speaker": "Speaker 1",
    "text": "bull state tomorrow. But the chance of that bull state remaining for the the following day is essentially 0.8 representing 80% times by 0.8. We're tsing it by itself, which leaves us with"
  },
  {
    "i": 69,
    "speaker": "Speaker 1",
    "text": "0.64, which is 64%. So, we've got our 2-day forecast predicting suggesting that there's a 64% probability that in 2 days time we will still be in a bull state. And so, by doing that calculation"
  },
  {
    "i": 70,
    "speaker": "Speaker 1",
    "text": "for all the different combinations, you end up with the ability and a basically a way to kind of show on a huge matrix with percentage probabilities all perfectly laid out what the chances are"
  },
  {
    "i": 71,
    "speaker": "Speaker 1",
    "text": "that that asset will be in a specific state in a specific amount of days. You can see how different this is from doing trend lines and stuff, right? This is mathematical and equationbased. And this"
  },
  {
    "i": 72,
    "speaker": "Speaker 1",
    "text": "is what quants are doing. This is how the people who understand this as college kids end up landing jobs that are $650,000 a year out of college. And that's true and I am making a video about that. But"
  },
  {
    "i": 73,
    "speaker": "Speaker 1",
    "text": "if you extrapolate this idea out quite a bit, instead of looking 2 or 3 days ahead where we're doing nice cute little squaring and then cubing these numbers, let's say you wanted to do a 28day"
  },
  {
    "i": 74,
    "speaker": "Speaker 1",
    "text": "forecast. Well, now we're getting into something where we're now multiplying the matrix by the 28th power. And these numbers start to get mind-boggling. And actually, if you look at it on a chart"
  },
  {
    "i": 75,
    "speaker": "Speaker 1",
    "text": "to see the kind of distribution of percentages, you'll see that it all basically converges into a single slither. And that slither represents how the probability of any of these outcomes"
  },
  {
    "i": 76,
    "speaker": "Speaker 1",
    "text": "is so small that there's no meaningful signal that you're getting from it. You know, for example, it might say, you know, in 28 days time there's a 0.2% 2% chance of this outcome. There's a 0.2%"
  },
  {
    "i": 77,
    "speaker": "Speaker 1",
    "text": "chance of this outcome, this outcome, this outcome, this. They're all going to be uniform, like 0.2%, but there's going to be so many outcomes and so many ways to get there that there's not really any"
  },
  {
    "i": 78,
    "speaker": "Speaker 1",
    "text": "point in using that projection down the line. And that is number seven, the stationary distribution. And so, how do you actually extract signals from all of this to actually make some trades? Well,"
  },
  {
    "i": 79,
    "speaker": "Speaker 1",
    "text": "it requires a process called signal generation. And that's number eight."
  },
  {
    "i": 80,
    "speaker": "Speaker 1",
    "text": "Because when I'm thinking about this, I'm like, okay, all this maths is good, but what do I do with that information?"
  },
  {
    "i": 81,
    "speaker": "Speaker 1",
    "text": "Well, despite all of the calculations and all the equations that have come to this point, the calculation is incredibly easy. And that's what I found with the way the quants operate. They do"
  },
  {
    "i": 82,
    "speaker": "Speaker 1",
    "text": "lots of complex things in the background only to simplify it with that foundation. So, what they do is is one simple calculation of this thing minus this thing. And so, let's talk about it."
  },
  {
    "i": 83,
    "speaker": "Speaker 1",
    "text": "Basically, they're looking at tomorrow, the probability of tomorrow being a bull state. And what they do is is that they subtract the likelihood of it being a bare market tomorrow from the bull"
  },
  {
    "i": 84,
    "speaker": "Speaker 1",
    "text": "market probability. And here's the genius part. The larger the number that you get as a result, the more money you will put into that trade. So the differential between the bull and the"
  },
  {
    "i": 85,
    "speaker": "Speaker 1",
    "text": "bear in this case determines how big that trade is going to be. So you're managing risk that way as well. So let me give you a concrete example. So, let's say the chance of a bull state"
  },
  {
    "i": 86,
    "speaker": "Speaker 1",
    "text": "tomorrow is 65%. And the chance of a bare state tomorrow is 20%. And of course, because we have to add up to 100, there's a 15% chance that we're going to be in a sideways state tomorrow. So, to extract your trading"
  },
  {
    "i": 87,
    "speaker": "Speaker 1",
    "text": "signal from this, all you do is take 65% which is the bull probability tomorrow, minus 20%, which is the bare probability for tomorrow, and you're left with 45%."
  },
  {
    "i": 88,
    "speaker": "Speaker 1",
    "text": "So we've got the direction because it's plus 45%. So we know that the idea is that we're going to go long. So each quant and hedge fund will have their own calculation for you know how strong is"
  },
  {
    "i": 89,
    "speaker": "Speaker 1",
    "text": "45% and how much will they put on that trade. I'd imagine that every hedge fund is going to be slightly different in that way. You know some people might look at a plus 45% as a really strong"
  },
  {
    "i": 90,
    "speaker": "Speaker 1",
    "text": "signal and put lots more into that trade and others might look at that as a little bit weaker and put less in. But the point is it's giving you the direction. And you might be wondering,"
  },
  {
    "i": 91,
    "speaker": "Speaker 1",
    "text": "well, how could that ever be negative?"
  },
  {
    "i": 92,
    "speaker": "Speaker 1",
    "text": "Well, you're doing the same calculation."
  },
  {
    "i": 93,
    "speaker": "Speaker 1",
    "text": "You're taking the bare percentage away from the bull percentage. So, if the bare percentage is a larger number than the bull percentage, then you're going to end up with a negative number. And"
  },
  {
    "i": 94,
    "speaker": "Speaker 1",
    "text": "so, the signal is to go short. And the degree to which that outcome uh is revealed is the degree to which you enter that trade. And so, this is far from the idea of like Bitcoin feels"
  },
  {
    "i": 95,
    "speaker": "Speaker 1",
    "text": "bullish today. It feels good today. This is like far away from that. This is calculations to say, you know, this is how bullish I am or this is how bearish I am and this is how much money goes in"
  },
  {
    "i": 96,
    "speaker": "Speaker 1",
    "text": "as a result of that. It's calculated."
  },
  {
    "i": 97,
    "speaker": "Speaker 1",
    "text": "It's simple but complex. It's truly amazing. So now, as we move into step number nine of the 10 that we're going to go over in this video before we get into the tutorial, the tutorial is"
  },
  {
    "i": 98,
    "speaker": "Speaker 1",
    "text": "relatively quick. I've just got a copy and paste prompt for you. So cool. In step nine, we're going to do something called walk forward back testing. Now, this walk forward back testing has taken"
  },
  {
    "i": 99,
    "speaker": "Speaker 1",
    "text": "me a lot of time to try and comprehend, and I'm not entirely sure I still do, but I'm going to explain what I do understand, and hopefully it will make sense. Now, when you're trading, often"
  },
  {
    "i": 100,
    "speaker": "Speaker 1",
    "text": "times, we'll create a strategy, and we'll do a back test on it. That back test basically takes all of the data that has happened in the past and applies the strategy to all of that"
  },
  {
    "i": 101,
    "speaker": "Speaker 1",
    "text": "history. So the issue is and this is where people come into a problem especially as retail traders is that you take that strategy with all the information it's learned from all of the"
  },
  {
    "i": 102,
    "speaker": "Speaker 1",
    "text": "all of the data right and you take that strategy and implement it into let's say 2020. Now it's not a good back test because the data from 2020 has already been baked in to the entire back test"
  },
  {
    "i": 103,
    "speaker": "Speaker 1",
    "text": "and you're applying it back in time."
  },
  {
    "i": 104,
    "speaker": "Speaker 1",
    "text": "This is really complex, but it's not a good back test because it's already learned from the future. If you're placing the strategy into 2020, for example, it already has the future"
  },
  {
    "i": 105,
    "speaker": "Speaker 1",
    "text": "outcomes baked into the strategy. And so, it doesn't make any sense. If we've got all the data right now as of today, that means it's learned from 2020. It's learned from 2021 already. And so, this"
  },
  {
    "i": 106,
    "speaker": "Speaker 1",
    "text": "walk forward back testing thing is a mitigation against that. Now, it's massively computationally heavy, or at least it was before AI. Hint hint. But every single day has to be entirely"
  },
  {
    "i": 107,
    "speaker": "Speaker 1",
    "text": "recalculated. So, the whole matrix has to be entirely redone. So, we never have that issue of having a strategy that's learned from all the data applied to the past and it just doesn't work. From my"
  },
  {
    "i": 108,
    "speaker": "Speaker 1",
    "text": "understanding, that's how it works. And if you don't understand, you kind of don't need to because it's going to be in the AI to do this for you. Now, we're at number 10, and things are about to"
  },
  {
    "i": 109,
    "speaker": "Speaker 1",
    "text": "get mind-blowing, okay? And so, prepare."
  },
  {
    "i": 110,
    "speaker": "Speaker 1",
    "text": "Earlier on, we talked about defining a state. Like, what are the numbers that define a state? We said, you know, 5% and up means a bull. Negative 5% and down means a bear. And anything in"
  },
  {
    "i": 111,
    "speaker": "Speaker 1",
    "text": "between is sideways. But that's subjective. Like, who decided that? We decided that. Humans decided that."
  },
  {
    "i": 112,
    "speaker": "Speaker 1",
    "text": "That's a subjective interpretation of what a bull and bear means. And obviously then we come into this natural flaw of the system doesn't work now does it? How can we have these subjective"
  },
  {
    "i": 113,
    "speaker": "Speaker 1",
    "text": "opinions and everything else is kind of calculated and mathematical but we're still left with the weakest link which is our subjective view. And so step number 10 closes all of that out and"
  },
  {
    "i": 114,
    "speaker": "Speaker 1",
    "text": "solves that problem. Solves that subjective behavior that ultimately allows us to really determine what bull means, what bare means, and what sideways means. And this is called the"
  },
  {
    "i": 115,
    "speaker": "Speaker 1",
    "text": "hidden marov model. And this is a part of the process that looks back over all of the price history of the asset we're looking at. All of the transitions, but all of the states and the labels that we"
  },
  {
    "i": 116,
    "speaker": "Speaker 1",
    "text": "attached to them earlier have been removed. So it's not learning from the labeling of states anymore. It's actually doing a whole pass through the strategy of pattern recognition itself."
  },
  {
    "i": 117,
    "speaker": "Speaker 1",
    "text": "It's looking at details like the continuation of the price going up or the price going down. is looking at a whole load of different data points without the labels. And so to make this"
  },
  {
    "i": 118,
    "speaker": "Speaker 1",
    "text": "like super simple to understand, it's almost like a babysitter. They come into the house and there's a whole bunch of children in there. They don't immediately know, you know, this child"
  },
  {
    "i": 119,
    "speaker": "Speaker 1",
    "text": "has ADHD. This child sleeps all the time. This child is crazy and violent."
  },
  {
    "i": 120,
    "speaker": "Speaker 1",
    "text": "You know, they don't know any of that stuff. And so a few days later though, once they've sat there and they've observed the children and the way they act and the way they interact with each"
  },
  {
    "i": 121,
    "speaker": "Speaker 1",
    "text": "other, you can determine a whole bunch of things about each child and assign or prescribe a personality to each child."
  },
  {
    "i": 122,
    "speaker": "Speaker 1",
    "text": "But it takes time to kind of analyze and sit back and watch. And that's what this hidden marov model is doing. And after all of that, now let's determine the personalities of the children. It'll"
  },
  {
    "i": 123,
    "speaker": "Speaker 1",
    "text": "actually put a label on the children like ADHD, violent, sleepy. it will do that across all of them. And it's doing the same thing across the data of the chart. So it's now actually prescribing"
  },
  {
    "i": 124,
    "speaker": "Speaker 1",
    "text": "a bull state, a bare state, and a sideways state without any labels existing previously. And so when you overlap the two of those where you've got the you know the 5% is a bull negative 5% and below is a bear the the"
  },
  {
    "i": 125,
    "speaker": "Speaker 1",
    "text": "subjective labels that we gave and also the hidden marov method labels that were generated you can overlap them and see where they are confirming each other and when they confirm each other that gives"
  },
  {
    "i": 126,
    "speaker": "Speaker 1",
    "text": "you the green light to move ahead right now that we've understood all of that and I hope you have that was all 10 of the elements that make up this hedge fund method but it's all kind of useless"
  },
  {
    "i": 127,
    "speaker": "Speaker 1",
    "text": "to you as just information. We need a real way to apply this into our own trading strategies and specifically using AI, get this onto our computers and running for us. So, you're going to"
  },
  {
    "i": 128,
    "speaker": "Speaker 1",
    "text": "get a couple of things here. The first thing you're going to get is a Claude code skill. This skill you can install into your computer, especially if you're using Claude Code. If you're not using"
  },
  {
    "i": 129,
    "speaker": "Speaker 1",
    "text": "Claude Code and any other LLM, you can actually take the oneshot prompt and it will just learn it on your system regardless of whether it's Claude Code or not. But this skill, this system will"
  },
  {
    "i": 130,
    "speaker": "Speaker 1",
    "text": "be applied to any trading strategy that you ask it to apply it to. So if I've got my strategy for Bit Tensor and all the subnets like I actually do in real life, I can copy and paste this prompt"
  },
  {
    "i": 131,
    "speaker": "Speaker 1",
    "text": "into my Clawude code. It can learn it and determine what needs to change about my strategy to go in accordance to this hedge fund method. That'll be a copy and paste prompt that will take you through"
  },
  {
    "i": 132,
    "speaker": "Speaker 1",
    "text": "from beginning to end very simply regardless of how much experience you have with AI or with trading. And then as a little bonus, I've created a pine script. As I mentioned earlier, this is"
  },
  {
    "i": 133,
    "speaker": "Speaker 1",
    "text": "a way to visualize the 3x3 grid of probabilities on your chart inside Trading View. This will be a separate copy and paste that you can go straight into your Pinecript editor on Trading"
  },
  {
    "i": 134,
    "speaker": "Speaker 1",
    "text": "View and paste it in. So with that, let's get into the tutorial."
  },
  {
    "i": 135,
    "speaker": "Speaker 1",
    "text": "All right. So, first things first is you're going to go to the first line in the description of the video and you'll be brought to a GitHub page. The GitHub page is going to give you all the code"
  },
  {
    "i": 136,
    "speaker": "Speaker 1",
    "text": "of everything I've worked on so far."
  },
  {
    "i": 137,
    "speaker": "Speaker 1",
    "text": "It's going to give you the pine script, the oneshot prompt for you to install on your Clawude code or any LLM for that matter and I'm going to walk you through how to do that. So, you've come over to"
  },
  {
    "i": 138,
    "speaker": "Speaker 1",
    "text": "the GitHub right now and you can see a series of things. Uh if you just kind of come down and see, you can see the two elements of this. The on camera build that we're doing right now. This is the"
  },
  {
    "i": 139,
    "speaker": "Speaker 1",
    "text": "Marov hedge fund method. If you click that, it will open up a link in another tab. And we're also going to click the pine script bonus as well if you're going to use this for trading view. So"
  },
  {
    "i": 140,
    "speaker": "Speaker 1",
    "text": "here is the hedge fund method skill that you're going to install into your AI. So you're going to copy it from this moment onwards all the way down. It's going to this is all the information that I've"
  },
  {
    "i": 141,
    "speaker": "Speaker 1",
    "text": "kind of put together so that you can uh create this skill in your system. So, I've copied it. You're going to come over here. You're going to click paste and click enter. There's then going to"
  },
  {
    "i": 142,
    "speaker": "Speaker 1",
    "text": "be an onboarding process that you'll go through where it's just going to install this whole thing into your computer. If you're on claude code, it's going to create a skill. So, anytime you have a"
  },
  {
    "i": 143,
    "speaker": "Speaker 1",
    "text": "trading strategy, you can just say, \"Hey, can you do the Markov run the Markov skill here?\" here and it will go through the whole process to make sure that the strategy is, you know, beefed"
  },
  {
    "i": 144,
    "speaker": "Speaker 1",
    "text": "up. So, it said I'm going to install the mark of hedge fund method skill into these this file about 90 seconds on Mac and Linux and up to two to three minutes on Windows. You don't need any keys or"
  },
  {
    "i": 145,
    "speaker": "Speaker 1",
    "text": "accounts or admin passwords. Great. This is Rowan's framework on Rowan Chain, an observable marov regime model that builds a bare a bull bare sideways transition matrix from any ticker."
  },
  {
    "i": 146,
    "speaker": "Speaker 1",
    "text": "Great. So if you're ready, you just type go and it will start the process."
  },
  {
    "i": 147,
    "speaker": "Speaker 1",
    "text": "And it's basically done with the process now. We've been about 2 minutes and 21 into this. And you can see that phase four of this whole process of the onboarding. It says it's going to run a"
  },
  {
    "i": 148,
    "speaker": "Speaker 1",
    "text": "um a marov reggime basically on the spy 10-year chart. And this is just a demo to show that it does in fact work. You could also then after this just say, hey, run it on Bitcoin, run it on"
  },
  {
    "i": 149,
    "speaker": "Speaker 1",
    "text": "Ethereum, whatever you want to do. And it will apply the Markov regime, everything we've talked about today to that asset. And it really can be an any asset. And just like that, the whole"
  },
  {
    "i": 150,
    "speaker": "Speaker 1",
    "text": "Markov hedge fund method skill has been installed. So whenever you want to use it on a strategy, you just type forward slashmarkov and you can see hedge fund method. You type that there and then talk about your"
  },
  {
    "i": 151,
    "speaker": "Speaker 1",
    "text": "strategy or whatever. And that's how it works. Next, we're going to just talk about how we can apply the Pinescript into our uh trading view. And all you do is come over to the Pinescript page that"
  },
  {
    "i": 152,
    "speaker": "Speaker 1",
    "text": "we talked about earlier. Click copy raw file right up here. Then you can go over to your trading view. I've already got mine installed, but I'm going to delete it so you can see it all work. On the"
  },
  {
    "i": 153,
    "speaker": "Speaker 1",
    "text": "right hand side, this is on the desktop app, by the way. We've got a mountain looking icon. That is the pine script icon. You can click that. And sometimes it helps just to bring this out a little"
  },
  {
    "i": 154,
    "speaker": "Speaker 1",
    "text": "bit further. Uh we can do control A or command A to select everything and we want to delete that. Then we're going to click commandV which is paste. This is the pine script right here. And all we"
  },
  {
    "i": 155,
    "speaker": "Speaker 1",
    "text": "want to do is click the play button here which is to add to chart. We can now close this and we wait for it to populate on the chart. And remember this is the Bitcoin chart. And there we go."
  },
  {
    "i": 156,
    "speaker": "Speaker 1",
    "text": "The Markov regime has been uh laid on here. This will work for any asset because it's just doing the calculations automatically. And the one to look at, obviously, we've explained the nine the"
  },
  {
    "i": 157,
    "speaker": "Speaker 1",
    "text": "nine kind of card uh view, but the long run mix is the the one that I like to look for. So, if we look at the bull percentage for tomorrow, it's 29% chance of tomorrow being a bull run. Tomorrow"
  },
  {
    "i": 158,
    "speaker": "Speaker 1",
    "text": "being a bare market is 42% chance and 29% chance of it going sideways. And so that that bare market being the highest percentage, the highest likelihood is because we have bare behavior um uh"
  },
  {
    "i": 159,
    "speaker": "Speaker 1",
    "text": "recently, right? It's just it's a sticky state as we talked about. So that's how it works. It all works here. I'll actually go and change the the chart."
  },
  {
    "i": 160,
    "speaker": "Speaker 1",
    "text": "Maybe we do let's say XRP for example."
  },
  {
    "i": 161,
    "speaker": "Speaker 1",
    "text": "And again, it applies the numbers for XRP as well. And you can do really anything here. Um I don't know what else I can kind of show. Stocks, Tesla. There it the mark of regime works for that as"
  },
  {
    "i": 162,
    "speaker": "Speaker 1",
    "text": "well. All right, so I hope you've got tremendous use from this. This is one part of a potential series on the topic of quant strategies that we can use AI to implement. If at any point you're"
  },
  {
    "i": 163,
    "speaker": "Speaker 1",
    "text": "doing this process and you hit a roadblock, you can always uh get in touch with me on 01 systems. It's the second link in the description. That's the only place really where I can provide feedback and help people with"
  },
  {
    "i": 164,
    "speaker": "Speaker 1",
    "text": "issues and bugs that they have along the way. So check that out if you're interested and I'll see you in the next one."
  }
]