The Robots Are Programmed by People!

Larry Hite offered:

“People haven’t changed, things haven’t changed, because what is the fundamental thing in all markets? It’s people.”

A reader tweeted me:

My response? Who programmed the robots?

One thought on “The Robots Are Programmed by People!

  1. High Frequency Trading is just another layer of profit at milliseconds time scales due to discrepancies of data speeds between market makers and other participants, for example you may not see profit in a five dollar gap in gold, but a market maker or a technically savvy trader can anticipate that move before other HFT traders due to their high speed connections, co-location and technologies that make the price read faster than others, which is why HFT is not for every body.

    In other words, HFT works around the 97% and above confidence interval, which means you need to be able to see a new price before others, in order to place a counter bid/ask, so others can fall into it by the time they see it.

    Trend Following, or even counter trend systems like what I believe Paul Tudor Jones does; are probabilistic risk management systems, as opposed to HFT which is an entirely software/technology dependent approach.

    HFT is very deferent from other trading methods, its like if you want to be Intel or HP. whether you want to supply iPhones or only its inner semiconductors.

    In my personal believe, HFT will tend to cancel its self in the future in terms of profitability, first is technology is getting cheaper, second is that it is becoming affordable by most market makers.

    What does that scenario leave us with?

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