Human Traders Are Trouncing the Machines

[volpri]

Machines, will not, in the longrun out trade good discretionary traders. At least not in our lifetime. The organ between our ears is potentially much more powerful than any computer yet devised.

 

[d08]

Machines, will not, in the longrun out trade good discretionary traders. At least not in our lifetime. The organ between our ears is potentially much more powerful than any computer yet devised.

And that organ also has more faults. Humans have emotions, tire and might have confidence problems.
Your statement is also quite funny when about 80% of all trading now is "machine" based.

 

[lovethetrade]

I wont even waste my time reading this thread. Humans don't trounce machines when it comes to trading and never will.

You can make a small fortune with automated trading, most will be lucky to keep their shirt with manual trading. That's the reality.

Only problem with automated trading is there's significant barriers to entry otherwise everyone would automate their strategies.

 

[comagnum]

Systematic trading has wider draw downs and their upside has taken a nose dive now that that arena is so crowded. Discretionary traders typically use a rules based approach to minimize emotions. Programming automated strategies is pretty easy these days. Even I can program on 4 different platforms and I am just playing with it for kicks.

Systematic traders do have to deal with emotions- after all they can have large draw downs and often shut them down at the wrong time - that was in Market Wizards. The problem is few retail will have the conviction and or account size to let them run in expanding draw downs. Systematic trading has its place - but to proclaim it is wildly superior to discretionary is just lying to yourself.

Barclays

IASG

Discretionary

Systematic

 

[d08]

I wont even waste my time reading this thread. Humans don't trounce machines when it comes to trading and never will.

You can make a small fortune with automated trading, most will be lucky to keep their shirt with manual trading. That's the reality.

Only problem with automated trading is there's significant barriers to entry otherwise everyone would automate their strategies.

On top of that. Why do the big funds constantly move away from discretionary trading, automating more and more. Are they sabotaging their performance? It makes absolutely no logical sense.

 

[truetype]

Barclays [Discretionary Index]
View attachment 178645

Eyeballing your chart, performance has been zero for the past ~5 years. Not much of an advertisement for the discretionary style.

 

[777]

HUMAN TRADERS ARE TROUNCING THE MACHINES
The contemporary low volatility trading environment has been kind to actively managed equity funds – particularly if they piled into large-cap momentum stocks like Facebook and Amazon, which have been responsible for the bulk of this year’s rally.

But while active managers have enjoyed three quarters of strong returns, quant funds – purportedly the future of asset management, according to many an “expert” on Wall Street – are falling further and further behind. As Bloombergreports, during the first nine months of 2017, the average equity fund was up 9.7 percent while quant funds rose only 0.6 percent, according to data from Hedge Fund Research.
https://www.marketarmor.com/2017/10/10/human-traders-are-trouncing-the-machines/

Sample too small.

 

[Quiet1]

Too much key-person risk with discretionary traders. Automated trading holds out the possibility of performance through application of science and engineering alone. No magic.

And that idea sells....

 

[volpri]

On top of that. Why do the big funds constantly move away from discretionary trading, automating more and more. Are they sabotaging their performance? It makes absolutely no logical sense.

ROFLMAO ...Because they can no longer find the good discretionary traders they need. So they turn to machines..programmers...etc...Traders just too lazy to learn what has to be learned to be a good discretionary trader. However, i predict within a decade there will be a resurgence of manual, discretionary based trading. Firms will see that computurized trading is not the pot of gold at the end of the rainbow. It is fools gold! 10 years from now it will melt away. Right now it is the rage and the new kid on the block. Kinda like styles......fickle.

 

[d08]

ROFLMAO ...Because they can no longer find the good discretionary traders they need. So they turn to machines..programmers...etc...Traders just too lazy to learn what has to be learned to be a good discretionary trader. However, i predict within a decade there will be a resurgence of manual, discretionary based trading. Firms will see that computurized trading is not the pot of gold at the end of the rainbow. It is fools gold! 10 years from now it will melt away. Right now it is the rage and the new kid on the block. Kinda like styles......fickle.

Right. Because automated trading, complex systems etc. are just so easy to master - unlike discretionary trading. That's why everyone on ET trades a HFT system where everything happens in 5ms...

Algorithmic trading has been around for over 3 decades. If that's a fad then that's a pretty long running fad. I know, cars are also a fad - horse carriages are going to make a comeback. Industrial robots are also a fad, manual labor will make a return.