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machine vs human
- Thread starter teacherdad
- Start date
Quote from teacherdad:
Is machine going to take over the whole trading world? What's the trend and limitation of algorithmic trading? Of the whole trading activity now, how much does machines account for?
what was the trading world like before 1997? For futures you had many middle men.
Best scenario if you went through a brokerage firm.
Trader -> phone clerk -> arb clerk -> filling broker -> pit trader
but more than likely there were about 2x to 3x that many middlemen if you were a small fry.
Machines have just gotten rid of the fluff. Anything that is mindless can be automated and that goes for every industry.
Quote from Random.Capital:
Why? A big part of the Black Art is disguising your size by using lots of small trades through multiple avenues.
I am but a simple country boy. Are you telling me that an algo needs to disguise the fact that it traded, say, at a bounce off of yesterday's low? Or at the end of the retrace to a breakout? Or at any number of other setups in the TA cookbook?
I do not think that machine gonna dominate the market. The main strength of the computers is their main weakness: They´re mechanical.
Human eye and mind had evolved trough a lot of time to adapt to dangerous environments trough recognizing patterns that lead to a possible danger. And machines are pretty limited in their patterns, even a random number generator has a pattern that can be recognized if you afford the energy and the time to it.
If the market become 100% automatic, there will be no chaos in there, the number of patterns would be limited to the number of minds that program the computers.
Another thing, machines can defeat us only in an environment with known conditions and a limited number of possible variables (like chess). The market is one of the most unlimited environments, if you have the mind and the power (financial), you will win out there.
Human eye and mind had evolved trough a lot of time to adapt to dangerous environments trough recognizing patterns that lead to a possible danger. And machines are pretty limited in their patterns, even a random number generator has a pattern that can be recognized if you afford the energy and the time to it.
If the market become 100% automatic, there will be no chaos in there, the number of patterns would be limited to the number of minds that program the computers.
Another thing, machines can defeat us only in an environment with known conditions and a limited number of possible variables (like chess). The market is one of the most unlimited environments, if you have the mind and the power (financial), you will win out there.