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Trading The Race to Zero

Discussion in 'Shares' started by Tropo, 23rd Sep, 2011.

  1. Tropo

    Tropo Well-Known Member

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    NSW
    "...Driven by a potent cocktail of technology and regulation, trading in financial markets has evolved dramatically during the course of this century.
    Platforms for trading equities have proliferated and fragmented.
    And the speed limit for trading has gone through the roof. Technologists now believe the sky is the limit.

    This rapidly-changing topology of trading raises some big questions for risk management.
    There are good reasons, theoretically and empirically, to believe that while this evolution in trading may have brought benefits such as a reduction in transaction costs, it may also have increased abnormalities in the distribution of risk and return in the financial system.
    Such abnormalities hallmarked the Flash Crash.
    This paper considers some of the evidence on these abnormalities and their impact on systemic risk...." http://www.bankofengland.co.uk/publications/speeches/2011/speech509.pdf
     
  2. Johny_come_lately

    Johny_come_lately Well-Known Member

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    While this paper is a little too technical for my understanding, it brings up some interesting points. Masive computers are trading against one another with incredible speed. There is a huge turnover of stocks, with profits made from a few cents. The algorythms use A.I. and change weekly as they learn.

    Where does this leave me? How can I compete against these machines? It's like 'Electric Dreams' has come true! :eek:




    Johny.
     
    Last edited by a moderator: 23rd Sep, 2011
  3. Tropo

    Tropo Well-Known Member

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    "Where does this leave me? How can I compete against these machines? It's like 'Electric Dreams' has come true!"


    It will decrease trading costs, but HFT will affect hedge funds, banks etc...
    But how it will affect individual participants needs to be tested..
     
  4. wdongli

    wdongli Well-Known Member

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    [​IMG]
    Where could I find the human?
    All of them just gone!
    It is boring you could not see the desperation and panic anymore!
    It seemingly would have been better to leave some humans in the zoos.
    How could it be possible with the delicious refreshes?
    Tell you a truth my creators have gone long time ago!
     
    Last edited by a moderator: 26th Sep, 2011