Enhanced Risk Management with Trader Profiling and Account Labels

Do you remember the first time you used a hashtag?  Probably not. But I bet you probably didn’t appreciate its significance at the time or envisage what a powerful tool it would become.  Now, imagine the power of a hashtag, as output from our Trader Profiling Analytics and how it will enhance your risk management.  We call this new feature Account Labelling. 

That’s the beauty of innovation – once the tools are in the hands of the customer they take on a life of their own.  Humans are compelled to innovate. Since cavemen discovered fire, we have been coming up with creative and useful ways to use it.

Innovation comes from asking the crucial question – “I wonder if there’s a better way to do this?”

That’s been our experience with the brokers and dealers who use Tapaas. It was because one of our clients asked: “Does Tapaas have a way to put accounts on a watchlist?” that our team came up with a solution that has exceeded all expectations.

Tapaas developed a watchlist which has evolved into an incredibly powerful feature we call Account Labelling.  Not only can you attach it to a trading account for Watchlist, but you can also use it with multiple labels to flag any aspect of trading behaviour on various accounts.

Just like the hashtag, it was not obvious at first how useful this feature would become until we decided to use the Label tool to enhance our Risk Alerts and Analytics Engines. We applied labels to accounts based on the results from our Alert and Analytic algorithms.

Trader Profiling Analytics Now Apply Labels to Accounts

So, with several Alerts and Analytics enabled to apply Labels, in addition to receiving an Alert when an account is identified as Toxic, a Label is applied.  Now, when viewing the portfolio of trading accounts, you can also see which accounts were Labelled as Toxic. There are many new Labels, including:

• Front Runner – regularly wins in first 2 seconds after execution;
• Movement Trader – trades primarily during price volatility ;
• LP Toxic – nearly always profits during 30 seconds after execution; and
• News Trader – trades mostly around news announcements like NFP

While analysing the accounts performance metrics, such as win/loss ratio, profitability, risk and leverage, you can also see these Trading Behaviour Labels and incorporate these features into your risk and execution policies.

The Account Label Management system features three types of Labels:

• System Assigned Labels – these are assigned by our algorithms;
• eXclude System Assigned Labels – these are applied by dealers to override the algorithm’s results.  (At the end of the day humans always trump AI.)
• User Assigned Labels –  this was the original group of labels (expand)

This new trader monitoring tool is a step up from your usual risk management process. Account Label Manager is an efficient way to monitor accounts with similar characteristics, allowing for faster responses and more informed decisions.

Most importantly, you can adjust the tool to suit your individual needs, even within the same trading desk. By applying appropriate filtering you can choose which ‘lists’ to monitor and what labels each dealer needs to create and assign.

This new feature complements Tapaas’ other client profiling tools, such as Cohort dashboard, News traders analytics, Trading Volume Burst and Syndicate Trading.

So, thank you to the broker who asked: is there a better way to label accounts? The answer is yes, with Tapaas’ Account Label Management system.

If you’d like to learn more about the Tapaas Platform and Trader Profiling contact us for a demo and take the first step in super-charging your risk management operations.