Ainslie Intelligence - Weekly Summary of Performance

Drone strikes on Saudi Arabian oil facilities over the weekend have knocked out half of the country’s oil capacity – about 5 million barrels a day. That’s roughly 5% of global supply. 

Oil prices reacted violently to the attack, sending WTI up more than 14% as soon as trading opened on Monday. Prices look to be stable with full resumption of oil production perhaps not returning for weeks—or even months.

The effects of the strike go further than just an increased oil price. Higher oil prices could push global inflation close to 5%.

Fortunately, the AI was in a long position for this trading pair at the time of the strikes. This was a classic case of a “black swan event”. A “black swan” is an event in the market that is impossible to predict yet has catastrophic ramifications. The AI cannot predict a true black swan event, but often things we think of as black swans may actually be just a trigger that causes the market to respond in a particular way that can be predicted.

The most important thing the AI can bring to a black swan event is the removal of emotion from trading through the turbulence that is created. The AI will respond in the same logical way it always does, looking for patterns and identifying the best position you should be in to maximise profit and minimise risk.

Luckily, in this case, the strikes happened when markets were closed giving the AI time to gather various data points (including sentiment) to make an informed decision.

The AI continues to find profit in the GSR after placing a buy on the 9^th of September. This trade had contributed to an overall gain of 13.5% and an outperformance of a buy and hold strategy by 8.7% since April last year. This pair performs well during times of volatility in gold and silver.

Here are our updated performance figures as of 16/09/19:

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