Automated Trading: Changing times?

Trading Discussion
1

I was reading an article on BBC yesterday and though to myself, is the financial world evolving and pushing out the human element?
A rise in automated trading in all hedge funds combined with very few employees is a clear indication that change is on.
BBC News - A dark magic: The rise of the robot traders

What does this mean for retail traders who focus on discretionary trading?
Maybe its just about time everyone adopted algo trading, otherwise keeping up with firm trading will be much harder as it stands.
However when things do go haywire in algo trading, the negative effect is quite pronounced and billions can be lost in just a couple of hours as it happened about an year ago at the NYSE.
Algorithmic Trading Glitch Costs Firm $440 Million - Slashdot

So as far as automated trading is concerned, which side do you bend toward?

2

This is very good thread mate. Looking forward to see more info.

Talking about me, I am not so interested in Automated trading.

3

I don’t prefer automated stuff, algorithms could fall at some point and I don’t want that happen to my sweet money :slight_smile:

4

automated trading is already here to stay its been around for almost a decade now. I dont know why people think its a new fangled thing. Personally I use both discretionary and automated systems. flash crashes and losing millions. What if a trader lost 450 million? would that be ok? probably not still has happened historically. Humans have probably have lost more than algos consider how many rogue traders there have been. IMHO the thing about it (HFT) that’s negative is they claim to be liquidity providers but in fact they are not, net they are liquidity removers of the market as they are selective.

5

Hey guys,

Anyone with first hand experience in fully Auto trading should give their view.
Not the robots that every other website sell. I mean Firm Trading Software( price > $100,000) annually.

6

Just got to know we have that kind of pricy systems. Most probably using by institutions.

7

Firm trading software is usually developed in house. There is purchasing through 3rd party development or system acquisition. Their view is its just their job, if it went under they would be out of one. Usually its headed in teams and they develop and implement new systems on a daily basis, manage current systems, and manage risk over the basket of systems and instruments they are currently trading.

8

Meihua, do you know anyone who has used these systems? Looking for someone with first hand experience.
Had a friend working as a trader in 2008, but he retired after the crash and can’t reach him.

Mainly interested in drawdown and the extent to which discretionary trading applies when using any
of these algo systems.

Grix