Thread: Computers to replace Traders

Computers will replace Traders since more banks are moving towards algorithmic trading. The number of traders employed in London will have dropped by a massive 90% by 2015:

http://www.finextra.com/fullstory.asp?id=15955

Thanks for sharing, intersting article.

As great as automated systems can get, they will never be as adaptable as a human mind. Then it would be a perfect science, if trading was about shooting straight and fast and markets should be functioning efficiently.

It'll be very curious to observe how all these algorithms and automated systems will do on NFP Fridays.

I smell another tech bubble here, and if I were a CEO of a financial firm I would be more concerned about training good minds into traders instead of hiring computer programmers in the effort of automazing everything.

But it should produce better chances for human traders since I am 100% sure automated systems will present their drawbacks.

Originally Posted by ;

Computers will someday replace Traders because more banks are moving towards all-electronic algorithmic trading. The Amount of traders used in London will have dropped by a Huge 90% by 2015:

http://www.finextra.com/fullstory.asp?id=15955

On a positive note, forum membership triples in the next 10 years

Here's the problem that most people dont understand and computer advoes dont need to talk about. Computers are much quicker in serial tasks than individuals but fail miserably to tasks which require parallel calculations such as pattern recognition and egy. Take for example chess. A computer can beat a grandmaster in case it can crunch all moves. A few egize while others grandmasters see using motions that are greatest motions 4-20 moves to the future. Whereas the grandmaster relies on intuition can compete with the best of them. The issue with the computer egy is that it is best in calculating the next move that is best. Of the computer will beat the best on earth, if your chess egy include calculating the moves. Grandmasters who plot their motions 4-20 moves to the future is going to have a great advantage over the computer b/c that is the place where the computer slows down to a trickle. Processing which our brains are more effective at than computers is required by multiple possible moves to the future. The cause of this is not the hardware but the logic of computer language. Its sequential and thats why it actually thinks 1 step at a time. Artificial intelligence is quite advanced mathematically but its still doesnt believe any different than the if then logic of a snail's brain. It means more if thens than a snail can. In the future will computers beat people in task but no time soon. I know that the markets are very very complex and the best people trade based on multiple future possibilities. This is why computers are still quite primitive when trying to people in language and eyesight recognition. As long as traders can exploit the future we'll continue to have our niche in the markets. Dont get me wrong. Computers calculate much faster and perform instructions better. Also robust systems can beat many traders. I am saying traders possess a niche and that is using discretion and the ability of a number people to consider multiple possibilities. Computers have already replaced people in egies but the egies will be the ones traders will still continue to have an advantage in. If anyone wishes to explore this research computers and chess or even improvements in artificial intelligence.

Allow it to be, I trade FX because I LIKE to trade, it's like a hobby, such as challenge, and there's absolutely no way I could ever let a few computer get (or should I say discard?) Me money.

Originally Posted by ;

Let it be, I trade FX because I LIKE to trade, it's like a hobby, such as obstacle, and there is no way I could ever let a few computer make (or should I say lose?) Me money.

I'm more worried about mass-produced trading from the big boys destroying the tradable patterns.

Do not stock funds that are major do application trading?
This sounds just like everything we've heard about for so many years regarding so many items, and I was a computer person.
If all the banks go totally automated, then nobody is working on them. If nobody is working for them, nobody is getting a pay check. So on and so on. As many individuals to purge a computer than it did to operate the desk since when does this take?

Besides, all these people who trade the market, trade FX, hedge funds are going to be automated? You can get if you desire me an app that makes me money. But there's a lot of folks coming here for money outside the banks.
Hopefully their application trading will make it more predictable. Maybe they can print what they're doing also to help out me.

Originally Posted by ;

Intersting article, thanks for sharing.

As good as automated systems may get, they will never be as flexible as a human head. Then it'd be a perfect science, if trading was only about shooting fast and straight and markets should be working efficiently.

It'll be quite curious to see how all these algorithms and automated methods will do on NFP Fridays.

I think markets will behave more wildly when automated trding becomes an ideal science. I think there is already a lot of automated trading happening and it is proving a success. I would not rely with this trend reversing and going the way of the solo human trader. Human traders need to use these algorithms.

I also think automated systems would work good on NFP. A pc calculating per tick using a algorithm backtested with past NFP data going back years. Those fast requirements are tough for humans to assess. For the computer, every tich might be an hour to contemplate and calculate

Even Kasparov won to the unbeatable Deep Blue... why?... Because humanity has the gift of imagination... computers don't.

though they will use algorithms... guess who is going to make those?

Its not that all traders will be gone, its computers will perform the'labor' and place term arb opportunities that are short. Humans will inform the process on the big picture items for a while to come... but don't wonder when the very first FF member will spot a algorithm trade pattern and place a method to make the most?

Indeed the need for speed is now so good, that
many are speaking about latency arbitrage.

However, in areas like proprietary trading where shooting a
egic risk position as well as a strategic trading position
is vital in order to beat the market, algorithmic
systems possess a bigger role to play.