Automated Trading And The Slowest Gazelle
We had an interesting chat about a post that George wrote about whether an Automated Trading system can outperform human traders.
The argument is a classic man versus machine debate that’s been going on, probably since the first time a wheel rolled out of a cave. And it reminds me of a story.
My friend was in one of those boring business meetings where a talking suit tells you how competitive the industry is. This speaker said the competition was circling like a lion around a herd of gazelles.
He then said, rhetorically, “If the industry is a gazelle, we have to be what?”
“Be the fastest gazelle,” he said, answering his own question.
My friend, who is pretty sharp, replied (as dozens of eyes fell on him), “That’s not true. We just have to be faster than the slowest gazelle.”
Everyone cracked up and even though it’s funny, it brings up my point about Automated Trading systems. Can an Automated Trading system beat every human trader? Maybe not.
What I want it to do is beat my trading returns, though, right? And I think a properly developed Automated Trading system can do that. After all, it has several advantages. It doesn’t stop. It doesn’t sleep. It doesn’t get bored of looking at charts and stock quotes. It doesn’t take bathroom breaks or decide it would rather go running when it should be researching Forex patterns.
So, I think, I may not be the slowest gazelle on the trading floor, but I think there are Automated Trading systems that are a little bit faster and, if they’re offering to carry my on their back, why not take a ride?
Related posts:
- Automated Trading and other Revolutions
- Automated Trading and Currencies
- Automated Trading and Index Funds
- Automated Trading and the Internet
- Automated Trading and Artificial Intelligence
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is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
Interesting info on man vs automatic trading platforms. I think that overall, automated trading advantages far outweigh manual trading. I’ve found that the biggest advantage of these systems is the fact that my emotions don’t get in the way of my trades. If you’ve done any day trading or swing trading, you’ll know that keeping your cool while deciding to enter or exit a trade can be challenging.
Hi Kevin–
Editing out emotions is the big benefit. I agree.