by 2010 any independent trader will have access to a first class bot engine that could be powered and tuned to compete against the big boys. the huge market that many are trying to tap is the application infrastructure that is needed to compete in the new scenario. since there are virtually an endless number of potential retail traders interested in competing in this new market field, we'll assist a new wave of professional brokers popping up with highly sophisticated server based algo bots that are offered to customers to engage in the battle for profitability in a market where the manual traders will bleed to death. this will be offered at competitive rates allowing for every retail to evolve in the food chain. in the end, the game is going to be exactly the same because all of the parties involved (institutions, retail, market makers) will be there to fuel the engine, however the tools used to do the job will be drastically different than those we use today.
UH....This was not a news item but a press release from a company in the business of automated trading. Nice schill advertisement. Maybe the moderators should have caught this one. Always consider the source.
By 2010 meat flipping will be "automated" just like the futures. AI is taking over fast food...no room for the small guy
people has been predicting this every year since the invention of IBM PC. There will be more GIGO type of swishing around then real money permanently changing hands.
The bots are dominating the more liquid markets like ES already. The "market-making" bots now account for at least 30% of the daily ES volume. So, it is not that 90% volume means a drop in small retail trading volume. It should be read as an increase in total volume, where the majority of the increase coming from the bots. These bots, however, failed to handle the market condition back in Aug and that hit hard on a few big algo funds. For good discretionary traders making money day in day out, they will grow with the markets, nothing to worry about
And it still shocks me to this day how many retail traders that think you can't build a profitable ATS.. If more retail traders would focus on developing and building up ATS strategies, there would be a LOT LESS money lost. They typically waste so much money while trying to figure out how to trade discretionary (while they don't do squat to develop their psychology).
I'm glad to hear so many posters are optimistic about the decline of program-trading. Incidentally,the guys at Goldman agree with you piezoe.They're hoping to raise up to $6bn for their 'Opportunistic Multi-Disciplinary Investment Fund' by January and the fund will NOT use computerised or quantitative approaches and investors will not be able to withdraw money by,guess what,2010. Following the quant-sector's disaster this summer they're already diversifying from relying on quant-funds and funnily enough it was the success of their own internal quant funds which prompted a race by rivals to buy their way into the industry and they all got badly burnt.
Um, just a side note. If you look on careerbuilder, the only trading jobs being advertised are for quants and Ph.D. programmers. All of it is geared towards short term, high frequency futures trading. So anyone holding for more than a day should be fine. But how many futures traders are really holding for more than ten minutes? I've been trading the ES for about 6 months, and it keeps getting harder every day. The ES has become a very hard instrument to trade. It is obvious from the speed of the moves that it is computer driven. I am concerned about my ability to compete going forward, especially when I hear about Chicago area arcades closing up. A lot of those people were well trained.
Please do not take this personally, but you posted. quite innocently i'm sure, something that really gets my goat, and that is the idea that IBM had anything to do with the advent of the PC, and when they finally did get into the business they actually set it back by several years.. They could have been a real force for progress, but they were not. They chose not to participate until they were forced to. It was one of the worst business decisions any company has made in the history of modern business. And IBM eventually had many rough years as a result of their pig headedness. They were very much Johnny come lately's. When they first got into the PC business (with the IBM "peanut", which sucked big time), after finally realizing they had no choice, they published an Ad which said in effect that IBM was bringing "legitimacy" to the microcomputers (as they were then called). Digital Equipment Corporation (DEC) then published a counter Ad that said "the Bastards say Welcome." Please, please, never again suggest IBM had anything to do with the advent of what we now call PC's. They did not. Microcomputers, which eventually became what we now know as PC's were an outgrowth of experimenters who were selling "computer" kits based on a failed integrated circuit project at INTEL which was intended to produce a programable 8-bit chip to run washing machine. Was it the 8080? It's been so many years the details are no longer remembered by me. But it was fledgling companies like IMSAI, ALTAIR?, Ohio Scientific, Osborne (an important software innovator) , then later the Commodore and Apple, which i think piggybacked on Commodore's O.S. and then of course microsoft which used predatory marketing to sell some of the worl'd worst software. It was not until competition from LINUX that microsoft developed its first really good operating system for non-commercial users..