How algorithm controls trading and retail trading is dying.

Trade negotiation is taking place between US and China. Speculations are high for both outcomes. Algorithms are set for the events.

Usually, algos are designed to crawl the web, understand the nuance of it (positive and negative) and then allow bots to go long or short, even in after hours within seconds.

Source: Wikimedia Commons

Today, Wednesday (9th October, 2019) SPX500 index was up almost 1% on the possible optimism on some short of deals on trade negotiation between US and China. Just few hours after market is closed, a news broke out from the South China Morning post:

US and China make no progress on key trade issues in two days of deputy-level talks, sources say.

All major stocks and indexes were down by 1% on the onset of the news. Few hours later, another news broke out from the Bloomberg:

U.S. Weighing Currency Pact With China as Part of Partial Deal

Algos were unleashed again. Indexes and majors stocks recovers immediately. Now imagine that how many stop limits for futures of Indexes may have triggered due to this chaos.

The real winners are algos. Since they can trade the news within milisecond, they take better positions. The retail traders are caught in these chaos and lose their positions.

This is the power of AI and computation control by the top 1% that outsmart the retail traders and confuse them to the hell. Should AI be taxed to provide UBI to retail traders who are losing their edge?

At the advancement of cryptocurrency, DeX and DeFi, AI will be more pronounced. It is much more easier to coding for bots to trade cryptocurrency.

When cryptocurrency will be wildly available and there will be thousands of security coins for renowned companies, trading Bots will be more important and powerful than ever.

Here is the question: can we get the benefit of automation and productivity from this progress, or will we be the victim of it (i.e. losing our jobs)?

More sources: Conflicting Trade Signals Rocked Markets With Three Hours of Chaos

U.S. stock futures bounce back after conflicting reports on state of trade talks

Disclaimer: This opinion is not a financial advice, it my personal perspective and opinion. Please seek professionals for financial decisions.

Image sources: Most images are open sourced (e.g. Pixabay, Wikimedia etc.) with Creative common license. Some images are used with due courtesy to respected owners.

Thanks for reading.
@dtrade
Cryptominer , occasional trader and tech blogger since 2013