Capitalizing on Chaos - My Incredible Market Journey
Dr. Hans Hannula, PhD, RSA, CTA
I believe that before you do business with someone, you should know something about them. The purpose of this article is to explain to you how I approach trading the markets. My approach is very unique, very scientific, and quite effective. I believe that to win in the markets, you need a edge, and that edge comes from knowledge, and that knowledge comes from research. I further believe that research is useless without being reduced to practice, that practice reveals the flaws in research, and that combining practice and research using modern Quality Process Management will improve both.
I believe that markets are not random at all, that there are physical and mathematical laws that can be used to analyse exactly why markets behave as they do - from soaring booms, to crunching crashes, to quite lulls.So I have concentrated my efforts to answer the question "Why did price go to that level at that time?" My search for the answer has led me into two areas. One I call Market AstroPhysics, which deals with the solar energy system, its effect on humans, and the resulting mass psychology. This psychology is what produces the orders that drive the markets. The second area of my work is my Market Chaos Theory. This deals with how to model markets mathematically. Its goal is to develop models of markets that work, both for prediction, and to of understand the behavior of markets.The third area of my work has been in Chaos Trading Technology. This is the development of computerized trading tools to automate and exploit my findings. This work uses the latest in computers, programming techniques, and system science. Its goal is to produce machines that automatically, scientifically, and safely trade the markets. To date, this work has led me to discover the exact physical mechanisms, mathematical equations, and behaviors that underlie all market movements.. This knowledge has led me to profitable trading using the latest in Chaos Theory.Before I jump to the bottom line, let me tell you about my incredible market journey. It's the story of my journey of learning about the markets, how they really work, and how to apply Chaos Theory to them.
First, let me give you a little background, so you will know what sort of person I am. By training I am an engineer, and a scientist. I am a 1964 graduate of the Air Force Academy, and earned a PhD in Electrical and Computer Engineering at the University of Wisconsin, with a minor in Automatic Control Systems, specializing in nonlinear systems. While serving as an Air Force officer, I was a jet instructor pilot, and a combat pilot in Vietnam (426 combat missions). I taught at the Air Force Academy and established the microcomputer track in the Electrical Engineering Department. After 13 years, I left the Air Force to join Bell Laboratories. I worked in computer controlled communication systems development. I did exploratory development, including the first of a kind fiber optic Video Information System. I was awarded 6 patents, one for a unique optical switch. At the age of 50, with 13 years at Bell Labs. a national recession underway, and two young adults entering college, I left a $90,000 a year job. My AT&T business unit was hemorrhaging money, downsizing, and having limited success at fixing the problems. After trading and studying the markets part time for over two decades, I decided it was time to do it full time. When AT&T offered a buyout program for which I qualified, I jumped. I now live in Denver and trade the S&P futures using my own custom software. I write a newsletter, do two hotlines a day, do market research, teach several courses, and publish a few articles. I am the father of three children, have a wonderful wife, and enjoy a comfortable home. But most of all, I love the markets.