Robot Stockbrokers to Replace Humans?
AlgoRates.com's High Profits Have Experts Wondering Weather Humans Will Soon be Outsourced by High-Tech Cyber-Brokers
New York (I-Newswire) September 21, 2013 - Will humans soon be completely outsourced by robots in the trading of stocks, commodities and foreign currencies?
"Not so fast," says James Roth, a senior analyst at AlgoRates.com in the United Kingdom. One of the most successful investment funds in 2012, AlgoRates name has now become synonymous with algorithmic trading, the trading done automatically by computer programs. Recently, the Wall Street Journal's MarketWatch has named the AlgoRates.com software, "one of the most profitable trading robots in the market today." (http://www.marketwatch.com/story/humans-to-be-outsourced-by-robots-2013-07-25).
However, during an exclusive interview, Roth explains that for algorithmic trading to be successful, it requires expert human analysis and supervision.
The proportion of algo trading in the market is growing fast. In 2006, one-third of all trading in stocks in the United States and Europe was generated by such automatic programs or robots. In just three years, however, that number is up to 73% of all volume in the US equity markets.
At the London Stock Exchange, more than 40% of all orders were generated by robots in 2006. Today, that number is as high as 70%. In foreign currency markets, nearly 45% of orders are driven by automatic programs designed by humans but automatically executed by robots. In futures, bond and option markets, the proportion of algo-trades is also on the rise.
"It was not always that way," says Roth. Algo Capital (http://www.AlgoRates.com), one of the most successful algorithmic traders in 2012, has invested heavily in the past years in developing what experts describe as one of the most profitable trading robots in the market today.
"The computerization of the trading in financial markets began in the early 1970s," explains Roth. "An important milestone of this process was the New York Stock Exchange's 'designated order turnaround' system, also known as DOT. This system was the first to send electronic orders to the market in the US."
In 2001, a team of researchers at IBM (International Business Machines Corporation) in the United States published the experiments they had conducted showing that their algorithms were able to consistently outperform human traders. This gave the industry a push that further attracted participants in the financial markets to algo-trading.
"Machines can react faster to new data, and they have no emotions when reacting. This helps to explain the success of algo-trading and its better performance," says Roth.
When it comes to speed of thought and processing data without emotional hindrances, many experts agree that computers can be more effective than humans. However, Roth believes that their success in ago-trading depends on the development of the most precise algorithms, and the integration of these robots with human supervision.
"The competition is fierce," says Roth. "We are constantly modifying and improving our algo-trading robots to stay ahead and improve our results." This process involves the best computer brains and experienced traders in the business.
And yet, for these robots to be successful, they still need human expert traders to supervise them. "At the end of the day, robots will never be able to completely replace human traders. There are aspects of the market that only humans can understand," adds Roth.
"But the combination of split-second market analysis and decision making by the robot along with our human traders' experience and expertise has proven an unbelievably successful combination."
About Business Insider NY
Leading Business Journal.Less..
Business Insider NY
232 Riverside Drive
New York, NY
Phone : 1215395930
Published On:September 21, 2013
Print Release:Print Release
If you have questions regarding information in this press release contact the company listed above. I-Newswire.com is a press release service and not the author of this press release.The information that is on or available through this site is for informational purposes only and speaks only as of the particular date or dates of that information. As some companies and PR Agencies submit their press releases once per week,month or quarter, make sure to check the official company website for accurate release dates as our site displays the I-Newswire.com press release distribution date only.We do not guarantee the accuracy or completeness of information on or available through this site, and we are not responsible for or omissions in that information or for actions taken in reliance on that information.
Effective Management of Africa's Extractive Industries: The Role of Ethics, Regulations and Multinational Corporations
Pennystockdivas.com Announces Social Media Expansions
2.6 Million Australian Citizens Using Solar Energy for Household Power Needs
Sniper Investigation Start Private Detective Agencies in Major Cities in India
Enjoy 25% Discount On All Presentation Folders From PrintPelican.Com