Flair, imagination, craziness, illogical, vision, knowledge of history, patience, it's things like that where no computer can compete with a human trader. Computers have cornered the 'speed' angle so let them play there, and we'll trade where speed is not an advantage and still enjoy a big advantage over the machines. Also, don't forget that the markets are made up predominately of people and their emotions are what drives price. So take the humans out of the game, because the machines are better and you take all the emotion out of the market so will there be anything for the machines to get their teeth into? Hollywood has made billions out of the 'machines are going to take over' meme. It makes a good story because we humans secretly love hearing how we're all going to be destroyed. The reality is a lot different as right now I can't even buy robot lawnmower that mows my lawn without having to dig a wire beneath the surface. 50 years ago they were saying 'flying cars' and London to Sydney in 2 hours. No flying cars, not even good self-driving ones and London to Australia takes the same time as 40 years ago. Technology if you haven't noticed has basically failed us all over the last 50 years. Name me one big game-changing invention over the last 50 years like Nuclear power, electricity, automobiles, jet engines, telephone, computers. All of them are over 50+ years old. Now all we seem to get is a new iPhone or a 4K TV....
No disrespect intended (I am not interested in starting a flame war) but I must disagree here. Algos are utilised in the industry for trading on EVERY timescale. This lack of knowledge and understanding is prevalent in the retail community. Again I disagree, I think if you look at the numbers you'll find markets aren't driven by people and their emotions, but by the cold hard decisions made by algorithmic models. Human emotions play a tiny part in the grand scheme. You are missing the big picture. The PRICE of technology has dropped by a collosal amount as that is what consumers have demanded. There are no flying cars or hypersonic planes because demand for such products won't currently support the associated costs. OK, I'll name one. The internet. An invention which has absolutely revolutionised the world in just 20 years. To be honest, your post sounds an awful lot like you are trying to convince yourself that you are still relevant, rather than accepting the truth of the matter.
Love the subtle put down - as in retail traders know shit, listen to me instead. So if markets are now driven by Algos, what were they driven by before the algos? Astrology? The charts I trade are no different to those of 20 years ago, NO different. I see the same patterns due to emotions that I saw 20 years ago and if you were to look at a 1900-1920 chart of the Dow there is NO difference, the emotions were there then, they're there now and they'll be there in 20 years time as well. So human emotions currently play a massive role in the markets and will do for the next many decades. if the algos are that good they would have taken over by now, but they haven't, and when I look at the returns offered by all the algo funds, I don't see much to write about apart from a select few. Most of them as usual seem to be there to make the promoters money via fees. Anyway, please tell me when the switch-over date was from humans and their emotions dominating the markets to becoming irrelevant and the machines dominating instead? 3 years ago, 5, 10 because I don't see any change in the charts and I would pick these things up. Consumers wanting cheaper prices for tech? Who would have thought of that? Still, nearly 47 years after the Americans put a man on the moon they don't even have a rocket that can put a man in near orbit. The point I'm trying to highlight there is how far we've all sunk re tech. Von Braun is probably weeping in his grave at what's become of his legacy. The internet is not a new invention, it's just a big computer network and they were invented years ago. Same with the mobile phone, just an extension of a landline telephone first invented 100 years ago (give or take, I'm not sure when). So my question still stands - name one life-changing massive invention we're using today that we weren't using 50 years ago? And think about the internet, what's it's really done to massively change the way we live like Electricity, the car or airplane? Watch more porn, check? Play games with somebody in Korea, check? Easily work out if it's cheaper to fly on a Wed rather than a Thursday, check? Talk to my friend in Italy for free, check? Waste time on message boards like this , check? Quickly check my bank account, check. Hardly a revolution to anyone's life but still good I admit. So no, I'm not trying to convince myself I'm still relevant in light of the Algos. I know I'm relevant and that relevance in the markets isn't going anywhere. Algos do of course have a big role in the markets, but no good algo working off higher than a 1m chart is going to be a match for a good human trader for a long long time.
Perversity is another concept computers can't easily grasp, if at all, and if there's one word best used to describe the markets and trading it's perversity. Perversity dogs ALL traders ALL the time. Which means it will also dog ALL Algos ALL the time. And that's why they are no threat to the good human trader. My whole trading strategy is designed around perversity, and that's why I KNOW I'm not about to become irrelevant, nor is any other human trader that recognises the markets are all about perversity and uses it to his advantage either to make profits or conserve losses. In fact, wasn't it Nav who used perversity against the Algos in the S&P? Yes, and he therefore became a threat which is why they took him down. In effect he recognised their lack of perversity in their trading so took full advantage of it. And those Algos were programmed by some of the best.
So until someone can program an Algo to recognise and use perversity no proper human trader should be worried or feel 'irrelevant'. However, the markets don't always deal in single perversity, they can add perversity onto perversity meaning double perverse. A human trader can often recognise this and adapt to the double, sometimes even triple perversity price throws his way. An Algo has no chance, literally no chance with this.
Wasn't meant to be a put down. Retail traders tend to understand very little about the industry, as the majority of posts here demonstrate. Seriously!? Just like an F1 car is a box on wheels and the wheel was invented thousands of years ago... A comment such as this is an instant tell that I'm wasting my time with this conversation. If you can't grasp the seismic changes the internet has brought about for business and society as a whole then there's no point taking this any further. I only happened upon this thread because I drop by ET every now and then to catch up on new posts by quality contributors such as RallyMode and Garachen. I should have known better than to post myself. My mistake. I'll unsubscribe from the thread now. Best wishes.
Unsubscribe all you want, but you only pick up on my minor points, never on my major one, like please tell me when human emotion become irrelevant in the markets and replaced by the Algos. That point of yours right there tells us all we need to know....
If the internet was theoretically banned tomorrow, what effect would it have on our lives? Not so much really. Therefore it's not such a big deal. Many people if you've noticed are starting to give up on much of the net. I don't see many people giving up on electricity. Ban cars tomorrow to be replaced by the horse and cart. Ban the airplane to be replaced by trains/ships. Ban electricity to be replaced by wood fires and candles. Those are the definition of a life changing invention everyone. Yet at next year's CET in Vegas all we'll get, no doubt the star of the show, will be an Iphone that's 1mm thinner than last year with a brighter screen. So again, please give me one life changing invention, invented over the last 50 years that wasn't already invented over the last 100? Hard isn't it? General technology has failed us over the last 50 years. In fact it's almost ground to a halt. However, there actually is one industry where technology hasn't failed us, medical. Look at what they're doing in hospitals today versus 50 years ago. Massive invention after massive invention. Now, that's technological progress.
Successful trading is also about taking advantage of others, and defiantly taking advantage of their mistakes. So what happens if/when the Algos do start to take over? Do you think many of them will open themselves up to getting caught? Getting trapped? Making the wrong move and the wrong time? Yes, so that's going to be an area where a good human trader will be able to profit from their trading as they will leave footprints. Everybody leaves footprints and clues in the market. This is what Nav did, he took on some of the best Algos in the S&P programmed by the best, and took them out. There are many many Nav's around the world. Anyway, where will all the profits come from with Algo dominated markets? You need somebody to lose in this game in order to win? So if the Algos are so good, who will lose? If nobody loses, there can't be any profits which means there can't be any markets. Algo trading therefore will be no different from human trading. There will be excellent Algos (in the small minority), good ones and many bad ones. That means they'll always be a role for a good human trader to exploit their moves with some flair and imagination. Many people right now are exploiting the Algos, that trend is tenacious...