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> "I think that you and cbsmith significantly underestimate the sophistication of these algorithms." Let's remember that this discussion was kicked off by some
by Crito 12y ago
> "I think that you and cbsmith significantly underestimate the sophistication of these algorithms."
Let's remember that this discussion was kicked off by some of these algorithms being tricked by a blatant April Fools joke.
The way some people talk about trading algorithms, you would think that they believe they are Strong AI that is lurking in datacenters biding their time. Really though, compared to a human, they are quite dumb. They just happen to be fast. Being smarter than the algorithm isn't sufficient if it is somewhat smart but blazing fast.
- harryh 12y ago> Being smarter than the algorithm isn't sufficient if it is somewhat smart but blazing fast. Sure it is. There are lots of people that make money in the stock market by making long term bets.
- Crito 12y agoBy that logic, this does happen: "it should be easy for you to go trade against them and make a lot of money." So what the hell was your point?
- yen223 12y agoStock markets aren't zero-sum. You can successfully do long-term investments without having to "trade against them".
- Crito 12y agoWhich suggests that: > "There are lots of people that make money in the stock market by making long term bets." Is not actually a counter to: > "Being smarter than the algorithm isn't sufficient [to trade against it] if it is somewhat smart but blazing fast."
- cbsmith 12y agoYes, there are a lot of buy side strategies, but what we're talking about here are HFT algorithms that balance out several times a second. They drive much of the liquidity of the markets and are the ones that react instantly to new pieces of information.