Its Human Intelligent vs Artificial now?

Discussion in 'Trading' started by savagemp5, Apr 15, 2011.

  1. Hi,

    I have been trading for about close to 2 years now. I hv lost like 10-15% of my AUM last yr, retreated and rethink about strategies, Real strategies. Not your typical technical indicators buy/sell signals, but whatever similar to Hedge Funds less the exotic swaps available on OTC.

    Having been profitable over the past 6 months, almost taking back most of my losses, dabbling with the business economics, quantitative relative value arb, option pricing, short selling etc, I realize it is more and more becoming like a game vs computers.

    Think of it this way, a real life PC game, like an MMORPG, played by millions of gamers. These so called prices that form charts are the monsters.

    Some charts, some strategies, with the use of (self-dev) tools are easy to clear and complete. I call these the low levels, used for building up your skills.

    Then, monsters get difficult, and requires to have advance tools (those of mine that calculates arbs or mispricing opportunities).

    Anyway to cut it short, you realize now the options market are basically computer AI controlled, and that some stocks/markets are hard to trade. As long as we can find our edge to beat certain difficulty, then basically its just a game to me, a game that requires real money and skills.

    What do you think ?
  2. heech


    The biggest difference? The monsters in your MMORPG don't really care whether they win or not. Their designers want you find it challenging, but thy ultimatly want you to have the satisfaction of winning.

    In the financial markets, every dollar you make is literally coming from someone else's pocket. They will work as hard as you do, as hard as they possibly can, to assure that you fail.
  3. Nope. In it MMORPG, active community type of gaming, the producers have to keep producing harder enemies, and you therefore have to think and think and rethink strategies to beat them.

    This is so similar to the markets, always random. Next you have players with you, competing for the same way to level up, kicking you out of rank.

    Its quite similar why so gamers actually top the charts, while you are unable to, so similar to trading. And just imagine, imagine that 100% of trading now is computer automated (its already close to 90% own by HFTs and dealers), its basically finding an algo or strata to beat the market, or their computers.
  4. Different tools, same game imo.
  5. emg


    if u seen the movie terminator, we are heading toward that way. look for john connor
  6. Heed this mans advice, for it speaks the truth
  7. This used to be true before QE. For the last couple of years there is a very big player willing to lose money to you and some people have not realized it yet.
  8. Exactly right..... In my opinion, that lesson is very expensive to implement into your trading plan.

    But ya QE basically creates an artificial template that restructures the Markets to appear buoyant and all prices rise....

    It has been a great mask.. I just wonder how close we are to midnight, I don't want to go home with a pumpkin..
  9. Horrible example. Trading is much more like a real time strategy game (starcraft 2 for example) where you play versus other highly skilled opponents.
  10. Well starcraft is yes real time, but not multiplayers. its always 1v1/2v2. There are cases like WoW, where all 70 players get free money.
    #10     Apr 15, 2011