HOW A HUMAN ERROR CHANGED MOTORSPORT HISTORY
F1, the pinnacle of motorsport. Where incredibly talented and exceptionally skilled drivers (with the exception of Mazepin) drive the fastest cars on the planet. These cars are packed with the latest technology and supercomputers helping the teams and drivers to select the best race strategy, fuel loads, tires compounds, wing angles, ride heights and brake balances, all at 200+ MPH speeds.
I'm a huge fan of F1 and have been closely following it and watching every single race since 2009 when Jenson Button won the F1 world championship. I love the Human + Machine connection that F1 creates. The best racing drivers in the world + the best computer technology in the world. It is very reminiscent of the financial trading world where the best traders use the best computer technology to win the race of making money from the markets faster than anyone else.
In December 2021, 108 million viewers joined me in watching the Abu Dhabi Grand Prix, the final race of the most dramatic season F1 had delivered in decades.
F1 Drivers - Max Verstappen from Honda Red Bull racing and Lewis Hamilton from Mercedes AMG
The 7-time F1 world champion vs the young, edgy and fearless Dutch super-talent in the “winner takes it all” final race of the 2021 season. The racing in Abu Dhabi did not disappoint. Both drivers left everything they had on the desert race track under the lights. To me, both drivers equally deserved to win.
However, to the astonishment of me and the 108 million other fans around the world watching the outcome of the 2021 world championship was decided by a “HUMAN ERROR”. A human error by the race director Michael Masi, who made a simple observation error when he identified which cars should un-lap themselves before the race could be restarted. This allowed Verstappen to win the Abu Dhabi race and his first F1 world championship, and denied Hamilton the chance to win a record-breaking eighth title.
The FIA (governing body of F1) said in their report afterwords:
"The process of identifying lapped cars has up until now been a manual one and human error lead to the fact that not all cars were allowed to un-lap themselves".
The statement added-
"The report finds that the race director was acting in good faith and to the best of his knowledge given the difficult circumstances, particularly acknowledging the significant time constraints for decisions to be made and the immense pressure being applied by the teams”.
Michael Masi was relieved of his duties by FIA but the result of 2021 Abu Dhabi Grand Prix stands and Verstappen is the F1 2021 world champion.
Michael Masi - F1 race director from 2019 - 2021
Why do humans make mistakes?
A very simple task under normal circumstances. Identify which cars can un-lap themselves during the safety-car period to improve the racing so the backmarkers don't get in the way of the lead cars. My 7-year-old daughter could do it and Micheal Masi has routinely done it hundreds of times before. But in the Abu Dhabi 2021 Grand Prix, the safety car brought out by Nickolas Latifi’s crash 5 laps from the finish meant that Masi was under huge pressure from Mercedes (Hamilton’s team) and Red Bull (Verstappen’s team) who both tried to intervene in Masi’s decision-making process. Under pressure from teams, time running out to the end of the race and the significance of his action weighing heavily on him, Masi just “choked” and failed to correctly identify which cars must un-lap. His brain saw a shortcut without looking at the whole field of cars. This is a very common and typical problem the human brain has – when under pressure we find shortcuts instead of using our full cognitive horsepower.
Think about it. Imagine standing on a large stage with all the lights at you and thousands of people, including all your friends and family, staring at you. You have earphones where you can hear all other people chatter. And you see the countdown in front of you with just a few seconds left and you have to answer: what is Fifty-two minus fourteen? If you give the correct answer you get your day's pay; if you say the wrong answer you lose everything you have – Your job, your reputation, your future. It is very hard for us to perform even simple tasks when under pressure.
Similarly, it is very hard for traders to perform well under pressure when faced with a fast-paced market. Is there a trade setup? Should I open an order? Of what size? Should I close my open positions? What if I miss out on profit? My last trade was a loser. What if I will lose money on this trade again? The heat is on the traders all the time since the market never sleeps or waits for you to make up your mind.
Going back to our hypothetical math challenge with you standing on a stage with people staring at you. But this time you have a pocket calculator in your hand and you have no earphones with people’s chatter distracting you. It's super easy now, right?
This is what the FIA thinks as well. So following the review of Abu Dhabi 2021 race, for the 2022 season the new race directors will have:
Information and communication on which cars need to un-lap themselves be handled by a computer.
Race director role will be split between two people.
Replaced by the computer
There is a lot of media scaremongering that computers will replace humans. While in some limited areas this can be true, it is not what is happening in real life. In real life, AI is creating more jobs and crucially more high-skilled jobs that pay more. The FIA did not replace race direction with AI. It actually created more supporting roles so the race director does not have to deal with so many tasks at once. And crucially, the AI is added to help, not replace, the director.
We see this in all areas, be it finance, motorsport or health care. AI is helping humans, not replacing them. AI is taking care of the things that humans struggle with when under pressure. Tasks such as analyzing big data, processing tasks, or functional tasks. But humans retain the senior decision-making roles.
AI will not decide whether you should have an operation – A doctor with the help of AI data will.
AI will not decide how to trade the market – you will, with the help of AI data.
How to use AI in trading?
At DARA we're not replacing traders with AI. You still trade your trading strategy. We're simply helping you identify how to best trade your trading strategy and automate the process so you don't have to worry about making critical financial decisions under pressure. It's like always having a pocket calculator on hand when faced with a math challenge. To succeed in the markets, AI assistance is now essential.