Will algos&AI take over? Is discretionary trading coming to an end?
- Thread starter orbit23
- Start date
Most retail traders are already trading with/against Algos/AI/HFT robots.
In my opinion, if you are a good trader then it will not have a "substantial" difference in your trading.
The only thing that might change is your "trade duration" since the robots can pick up on breaking news/market shattering headlines exponentially faster than a human can.
In my opinion, if you are a good trader then it will not have a "substantial" difference in your trading.
The only thing that might change is your "trade duration" since the robots can pick up on breaking news/market shattering headlines exponentially faster than a human can.
I think the choice of tenor is key. Short end of the curve: HFT, algos trading news/events impossible to beat with retail technology/set-up. Technical/swing trading? Don't know, longer term? Well, machines cannot speculate, they can make excellent inferences based on ML and all sorts of techniques with "perfect" memory but they are not as creative as the speculator, so longer term I think is where the juice is.
PS: I am setting discretionary trading and speculation equal.
PS: I am setting discretionary trading and speculation equal.
Traders have always known that they must beat their opponent, which up until recent history has been investors/traders and market forces. If you don't start to study the robots and algorithmic trading then they will beat you, simply because you don't know who you are trading against, and therefore what they are likely to do.
Yah, shure.
How, exactly, is your algo going to predict that I'm going to want ice cream in another 6 minutes and 22 seconds? Or that a truck delivering my favorite brand of it is going to break down, thus creating a temporary shortage of it in my area - which will cause me to jump on my motorcycle and roar off into the night, increasing the demand for ice cream restocking there instead of here, and marginally improving gasoline sales somewhere in between?
Algos produce correlations. They give you a fractionally better chance of having an idea of what's going to happen on the average, not time travel or magical foresight. And no computer can keep up with human perversity.
Meanwhile, I've changed my mind, and am going to have a bacon sandwich. Mmm, bacon.
I agree completely. You never know from day to day who or what you’re trading against. All you do is simply follow your plan consistently and carefully monitor your progress. The end.