Investment Algorithm based on the Psychological Expectation

Abstract

As the economy grows, more and more people are profiting from investment products, such as gold, bitcoin, etc. Many people make decisions about their investment options by predicting the future price trend of investment products. We combine the prediction results with investors’ mental expectations to give a new model to help investors better decide their investment options. In this paper, we model portfolio of bitcoin and gold based on the price trend data of bitcoin and gold in the last five years. After predicting the trading price trend, we build a psychological expectation investment model to quantify the investors' psychological expectations and get an investment plan with both return and protection. And thus, we show that quantifying the change in investor psychology is a feasible and universal algorithm.