The Wisdom of Crowds

In his seminal work, The Wisdom of Crowds, financial journalist James Surowiecki notes that large numbers of people can often provide better or more reliable information in the aggregate than any member of the crowd can as an individual. The canonical example is that if you ask 50 people to guess the number of marbles in a jar, and provide them with an incentive to be accurate, the average of the guesses is likely to be closer to the correct answer than most of the individual guesses.

So, I am wondering, if we had enough people voting on where they think the S&P will close on any one day and provide them with an incentive to guess accurately, do you think we'll get an accurate collective guess? How do we incentivize the traders on this forum to give it their best guess? What could we give traders or do for them?

I appreciate the idea ... but I try to maintain no bias at all in the market's "likely" direction so I can just take each signal short or long when they setup.

For February 08 so far - my short trades have a winning % of 80.9% and Longs have 79.2% ... so the setup I follow usually is pretty close each month on both directions regardless of the overall market movement... (usually there is a slight bias in favour of the basic monthly trend)

I like the idea of the vote - but I'm worried it might negatively impact my trading.

bakrob99, you don't have to follow the result of the vote. Especially at the beginning while we're observing the results I don't think that anyone should use the average vote to influence their direction. However, the input of each trader is valuable as it will bring together a multitude of systems and opinions about where people think the market will close.

Also, the incentive that I've devised will allow you to rank yourself among your peers.

For those of you following this thread/topic we have now implemented this feature. The help page describes the feature best here:
http://www.mypivots.com/forecast/help

Here is the page that you can submit your forecast on:
http://www.mypivots.com/forecast

And here is a topic dedicated to the forecasting feature:
http://www.mypivots.com/board/topic/6288/1/crowd-forecasting-discussion