Automated Trading and Kaizen
For many people, Automated Trading is a strange and mysterious idea. Like any new technology, I suppose it takes some getting used to. Imagine how many people have trouble understanding Twitter. And Twitter is a multimillion dollar company and a behemoth of the Internet.
Automated Trading is the idea of using a computer program to buy and sell stocks or other assets. These assets could be currency, options, or futures. It turns out that since computers are very good at following directions and running a program, there’s a great potential to create systems that make money through trading these assets. The idea is fairly new and not yet popular. But we believe in just a few years it will become very common.
What about kaizen? Kaizen is the idea of making big progress over time through tiny incremental improvements. The Japanese economic miracle was driven directly with kaizen. The first Toyota Corollas and Honda Accords that came to America were a far cry from the comfortable machines they are today. They were tiny, uncomfortable and very economical. Yet this metamorphosis was created through a tiny improvement each year. After 10 or 20 years, it’s hard to recognize the original model.
This same incremental approach can be applied to Automated Trading systems. Through research and development, programmers and researchers can improve the system. Indeed, this is how most research and development works. The exciting thing is that the end result is a system that makes money with less risk and more profits. We can use the concept of kaizen to develop these systems.
One of the reasons That Automated Trading has yet to become popular is that successful systems are not yet common. It turns out that developing profitable systems that have low risk takes considerable time, effort and money. Most people give up if they don’t get results right away. But kaizen teaches us that if we can make a small improvement, eventually we will reach our goals.
Not only are the systems of kaizen practical tools to create technology, but the concept is also important. If we can keep in mind that anything is possible through consistent improvement, it makes it much easier to change the world.
Related posts:
- Kaizen and the Japanese Automakers
- Automated Trading and Investing
- Automated Trading and the Risk of Catastrophic Loss
- Automated Trading and Currencies
- Automated Trading and Futures
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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.
