The future of automated trading: round two - page 7
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that's what we're talking about. the data comes to you discretely. the data comes in ...spetoflag...look.... spetoflag...look. You don't have to turn while doing this. but you do have to look. If you don't look at the spetograph (let's say skip and look at every 5th) there's not much good, definitely not much. Look ... go straight ... look, go straight.
And that's the way it looks. Didn't look ... drove (no matter whether straight ahead or sideways)... That's it. Next traffic light I didn't look again... I won't attach photos. Many people have imagination here and can draw a picture yourself))))
They may not be traffic lights, they may be corners. It's a discrete incoming information and you have to analyse it when it arrives, not an hour later...
Algorithm Glavnij kompetr changes it... (It's not a laughing matter)
It can be random if we don't know it. But we have the great advantage of looking ahead and being able to see changes to the road in the future as we go along it, unless of course we are blind ))))
It can be random if we don't know it. But we have the great advantage of looking ahead and being able to see changes in the road as we go along it, unless of course we are blind ))))
sandex: Я думаю, что в большенстве случаев мы слепые.
If you're not laughing, it's time for a sidebar.
Don't bother, he can barely speak Russian as it is.
Есть там одна страшилка, которую мне кажеться многие не понимают. Это запугивание большими организациями. Они типа сильнее и умнее. ... Могу смело утверждать. Что за громкими названиями разработок больших учреждений, чаще всего стоит идея (1 человек), тот кто додумался до этого. Все остальные (сторожа, водители, бухгалтеры, начальники…мать их…) не имеют к этому никакого отношения, они могут только помогать и (или) мешать реализации этой идеи в жизни.
Behind any big project there are always one or two people who came up with it. The others only help or hinder. A typical mid-sized hedge fund is one or two people with brains plus 3-4 others who help. Big companies can hold a lot of these "funds" where one or two think and the company provides all the infrastructure. Those who think do it well - PhDs in mathematics from the world's leading universities are not given for nothing. Shiryaev mentioned in his lectures that his best students flock to Western financial companies. Are you ready to compete with them?
If the private trader (even a single trader) will have a trading platform that is not inferior in speed, accuracy of execution of trading commands and the quality of quotes provided, to the trading platform of the big guys (even Goldman Sachs, if this is an example :-)))), then the future has both traders and such TA.
I propose to take it as an axiom that a single trader will NEVER have a platform as good as the platforms of big guys with supercomputers and colocation at the stock exchange. The question is about the prospects of trading in general, not about a specific platform.
Consequently, the share of automated systems in trading will increase significantly, up to the point where the nature of the market itself may change. What is now available to hundreds of traders will become available to thousands and tens of thousands, and the regularity found at the "quantum" level will be instantly eliminated by robots that will try to take a profit out of it.
As I have been saying: the market efficiency is increasing and the possibilities to earn money are decreasing. However, the reason for this will not be thousands of individual traders with a trading platform on their home computers, but thousands of robots installed on the computers of one or two or three large companies. This is an absolutely and unlimitedly scalable business. History has already seen an example of this - arbitrage between the futures market and the stock market, which was available to everyone, is now only conducted by the big sharks. You could even look at it this way: a hypothetical GoldmanPots company one by one will buy up all the few individuals with brains who manage to create profitable systems. The rest go to the garden...
Everyone simply chooses what they feel most comfortable with and where they feel the result will be best for them. The disadvantages that have been described in automatic trading, most of them also apply to manual trading.
Someone may think that manual microprocessors are more comfortable for him, but he is obviously not competitive in comparison with robots.
We have forgotten an important aspect - disadvantages are extensions of our advantages, and vice versa. Do you think that large funds monitor and try to trade on a huge number of instruments out of the good life? Imagine that you have a million dollars - how would the operation of your trading system change, what changes need to be made in it? Now imagine that you have a billion dollars in your fund - even more problems appear. So they have to try to take out a little bit everywhere, because no one will ever let them earn much. They have to diversify speculation by sector, market, country and so on. You cannot scalp huge trading volumes, you have to take a little by little. This is where you need mathematical models, powerful data centres to process them, and to place your servers directly on the exchange - all these are additional overheads. And all that for the sake of beating a poor beggar with big money (if we are talking about intraday trading) by a fraction of a second.
And where is the niche for individuals, how do they survive? On the contrary, the impossibility of unlimited scaling by money, say, vertical scaling, will push companies to horizontal scaling - an increase in the number of markets and strategies. There is no limit here, on the contrary, costs will only go down - computers are there, channels are there, people are there, i.e. each new strategy they will get almost for free.
By the way, mathematical models were developed much earlier and not for pipsing. They are designed to simply answer the question of WHY. Why should we expect profit? This is the main question of all trading, but very few individuals ask it.
I watched with interest the Wall Street Wars http://www.forex-trading-invest.ru/publ/12-1-0-105 I didn't notice that those guys and girls who made millions of dollars have any outstanding knowledge. Everything they do is on the level of intuition and reflexes. But it's been making money for years.
Another "fooled by chance"? When very many monkeys trade at the same time, one of them is bound to win and start giving interviews on TV. And there will even be someone who ends up winning long enough. He will be able to stop and start lecturing about his ingenious method.
Big companies are in business. For them, a positive maturity expectation is important. Individuals are just playing around, luck is important to them. This is now, but in the future will only worsen, because all situations with a positive expectation of money gobble up the big guys, and individuals, that in manual, that with machines, continue to play.