Can algorithmic trading systems beat human traders?

[IAS_LLC]

Dunno. I look at the world class poker matches and I am just astounded at the intuition exhibited by the best players.
I don't see how that can be "programmed".....

I used to play tournament poker myself, relatively successfully, and I found poker had more to do with patience and self control than anything else...computers beat the hell out of humans in terms of patience and self control

 

[IAS_LLC]

The key is the computer must be adaptible. Any static system will eventually lose

 

[d08]

Machines are stupid from the standpoint of market economics.
If you asked the algos 2 years what would be the direction of the copper market, they would have said "up"....when in fact the exact opposite occurred.
Bottomline: Algos best for very short-term technical trading....where supply and demand do not come into effect in a large way.

And what do the human traders do? Get one right every once in a while. I've never seen any human trader consistently forecast long term moves in any market. Reminds me of Paulson, got the 2008 move correct and did nothing ever since. I've yet to see anyone make 1-2 year predictions on supply and demand successfully.

 

[ETcallhome]

Both Chess and Poker are kind of horrible analogies to use to compare to the market. Chess is purely analytical and systematic. Poker and all card games too is based on the assumption that everything is random...assuming it's a relatively large multi-deck shoot.
You should watch these two documentaries on the stock market

yes, that is exactly my point, computer is good at games which are horrible analogies to the market

 

[Javier]

About computers. There non exist a computer that have been never beated on chess.

 

[ETcallhome]

About computers. There non exist a computer that have been never beated on chess.

so the trick would be to find that part of the market that is just like chess and let the computer trade it

 

[IAS_LLC]

...or use a different computer.

 

[IAS_LLC]

It seems a lot of you are making the assumption that the computer can only do one thing, and are forgetting that modern computers have far more memory and far faster processors than any human..It isn't algorithms vs human...its human with algorithm against human without. My money is on the dude with the algorithm who knows how to make it dance

 

[2rosy]

Is there something special about human "intuition" that machines can't replicate?

its really hard for a machine to get a truly random number

 

[felixbocharov]

Intuition is huge, but western people don't know how to use it. Go to India or China, those people know what is intuition and how to use it.