The Online Investing AI Blog

Hedge fund managers have one advantage over individual traders: they’re paid to trade. That’s not always the case for most traders, who have jobs (often full-time) to bring in money for their day-to-day living expenses, as well as save money for their trading activities.

With all that time, hedge fund managers can research and monitor the market. With all that money, they can hire people to research and monitor the market for them, while they play a few rounds of golf and shop for art.

For the individual trader, things are different. Many strategies that suit their lifestyle, won’t fit their dreams. Buy-and-hold is too slow and day-trading (without the ability to constantly manage the trades) can be too risky.

However, individual traders can use trend following strategies to compensate and compete with hedge fund managers.

Read more…

Online Investing AI hedge fund, INO, manager, money manager, stock moves, technology, trend following, trends

Of all the investment methods, Trend Following has one of the largest followings and a pretty solid track record.

The pioneer of trend following was Rich Dennis, a madcap investor from Chicago who turned a couple hundred bucks into a couple hundred million bucks by watching for well-defined trends. Instead of betting on each price movement, Dennis, and later his group of disciples called “The Turtles”, looked for solid movements that were indicated by breakouts.

Even though this sounds relatively easy, the group of Turtles interviewed for the book, The Complete Turtle Trader, by Michael W. Covel, admitted that it could be, at turns, boring and stressful–two emotions that lead to investment mistakes.

In the book, Dennis adds that technology has made it easier for trend following:

“Given what the computer can do today–compared to what it could do a few years ago, I just can’t see how any human could possibly compete with a well-designed computerized set of systems.”

One of our partners, INO has developed several applications for technical analysis that would help trend following traders. You can use a free analysis to determine possible buy and sell points, for example. You’ll have the report emailed to you. Other tools include educational videos and insights from professional traders.

Another powerful tool that can supplement and even hedge the activities of a trend follower is Automated Trading.

Read more…

Automated Trading, Investing, Money, Online Investing AI Investing, investing techniques, trader, trading, trend following, trends

It’s hard to make definite predictions how the winds of economic crisis will change the direction of investing trends, but it’s sure that how we invest yesterday will not be the way we trade tomorrow.

Economic and technological innovations are like swirling jitterbug dancers; they spin each other around in wild patterns. These moves are becoming more interrelated. The internet revolution started a chain of economic events. The current economic downturn is changing how we use technology, as well.

One of these twists or turns could make an Automated Trading revolution more probable. In fact, there are a number of factors in the current economic and technological environment that makes this scenario more likely.

Read more…

Accelerating Technology, Automated Trading, Internet, Investing, Money, Online Investing AI Automated Trading, economic trends, education, Investing, technology, trading, trends

As the Automated Trading revolution gathers steam, it will be fascinating to watch how it unfolds. Right now, very few people know or use Automated Trading systems. Yet this is not the stone ages. This is the world of the Internet, and even Internet 2.0.

In today’s ultra-connected world, information travels faster than ever. Even regular web sites and email is incredibly slow compared to blogs and Twitter. As the rate of information exchange accelerates, so does the rate of change throughout the world. Researchers and developers are able to communicate and leverage off each other’s work faster. And acceptance of new products and services by consumers is accelerating as well.

What does this mean for the Automated Trading revolution?

Read more…

Accelerating Technology, Automated Trading, Internet, Investing Automated Trading, Investing, Money, shopping, trends, volatility

Today I noticed the Los Angeles Times, the local newspaper. It’s important to say that I noticed it, and not that I read it. I don’t enjoy reading any newspapers, because they are full of killing, destruction, negativity, and bad news of every kind.

The interesting thing about the newspaper, is that it’s practically gone. Each section was just a few pages. A year or two ago, the newspaper seemed to be pretty much the same as in the pre-Internet era. But quite recently, it seems to have been reduced to a mere shell of its former negative self.

It’s pretty natural for a 20th century technology like newspapers to disappear. Not only has the Internet made them completely irrelevant, but there are a few factors in particular that are at work.

The first is the power of the blog. Since you’re reading this, you understand that anybody can distribute their own articles, and even their own newspaper, for free using a blog. I wonder how many people who first saw the blog understood the revolutionary web 2.0 power it would exert.

Another important player is the Wikipedia factor. Just a few years ago, the idea of an expert doing the writing was important. The Encyclopedia Britannica was edited by scholars. The newspaper was written by accredited reporters. But the paradigm of having an expert at all has disappeared. Now we have the whole group being the expert, and there is no need for a single writer.

The environments is also moving to the forefront of people’s minds. It seems pretty silly to kill millions of trees and pollute the environment to deliver information on paper on a daily basis. It makes about as much sense as sending a telegram.

So what does this mean for you? This means that anybody can succeed by riding the trends. People who were investing in newspapers a few years ago lost money. But many people who invested in themselves, started a blog, sold stuff on eBay, or pursued any number of Internet businesses had a great chance at making money.

Accelerating Technology, Business Strategy, Investing, Success 20th-century, blogs, eBay, future, Internet, making money, newspapers, Success, trends

It’s not just darkest before the dawn–it’s also the greenest.

Robert Kiyosaki, of Rich Dad/Poor Dad fame, points out in this article that when pessimism prevails, it’s time to make money. Why?

Everything is so cheap. People are not thinking rationally. And, as always, this is just part of a cycle and cycles continue. This means there are bargains available for smart people–or smart advanced trading systems–to take advantage of.

Kiyosaki quotes Hunter S. Thompson who said, “when the going gets weird, the weird go pro,” which, in this case means, in boom times, people tend to be drawn to unrealistic notions. And, likewise, in extreme bust situations, people tend to go the other way.

Another interesting story: Nouriel Roubini, an NYU professor, believes the real estate market has further to slide–something like another 10 to 15 percent more of a slide. In some areas, this will mean you can purchase a home for less that you could five or ten years ago! With a mini baby boom underway, will families who played it smart during the outrageous real estate price run-up begin to look for new–and bigger–digs?

Could be. That’s certainly one plausible trading scenario. But, the key is to make the trends work for you.

Business Strategy, Investing, Money, Online Investing AI cycles, kiyosaki, poor dad, rich dad, trends