Sabtu, 30 Juni 2012

are you trading against a robo?

whether you know it or not
whether you see or feel or experience or spot it or not
you are!
you are mostly trading against a robo!
an algorithm
a super-software!!!


welcome to algorithmic trading!


also known as algo trading or blackbox trading or robo trading or automated trading.


what is this?


simple......a super software, a highly intelligent superfast calculative algorithm does trading for you
while you sip coffee, play golf or take a nap or just watch the screen.


almost totally automatic trading.


all trading decisions as to what to trade, when, how much, at what rate........everything is decided by the computer, the algorithm, the software.....without any human intervention!!!


just like "deep blue" or "deep thought" super computers played chess against Garry Kasparov.


the only difference.....chances are that you are not Garry!!!


rather, in this case, the Garrys have teamed up with Deep Blues + Deep Thoughts to play against...........


.......well you guessed it right......poor you!!!


major fii's, pension, mutual and hedge funds and others don't trade......they algo trade!!!


they sneak in or out big elephant or dinosaur orders in slices with computer precision and stealth.


this they do to manage and manipulate the market and leave almost no footprint by making sure big entries and withdrawals are almost unnoticed.


algo trading makes sure that you see minimu spikes and dips in volumes while mammoth trading takes place.


these algorithms are so powerful that they are programmed to calculate a hundred things and manage "the game" in such a way that they always win!


these algorithms are designed to initiate lightening fast action on dumping on buying shares on the basis of news received electronically.


e.g. before even before human bank management comes to know of an aberration in the liquidity, these algorithms see it coming (courtesy their computational power backed by the intelligent programs) and trigger the action.....even before others come to know of it and understand it!


this is known as 'high frequency trading' (HFT) and has dramatically changed the world of trading from inside!


couple this the astronaumical advantage with money power these giants have!


according to a top consultancy firm, 73% of all US equity trading volume is algo trading!!!


in some other markets, the % trade volume taken care of by algo trading is even higher!


some of the recent crashes and abnormal moves are alleged to be caused by algo trading......rare chances when the secret gets spilled out!


and we haven't yet talked about algo bugs - intended or accidental!!!


welcome to the world of algo trading! 


the robo is always waiting for you. he can't see you.....but he can definitely feel you


when you get squeezed gently by him!!!

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