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Computerized Stock trading

Topics: 1   Posts: 3
Interesting article here by the USA Today regarding the pros and consof algo trading. 

Topics: 29   Posts: 82
Sure - these are the latest developments in systems. And systems should stay, for pros and for ameteurs, to put something between emotion and implementation.

But an ameteur might rather want to keep it simple, and still enter her/his trades so note this (obvious) caveat from the article

"... individual investors should stop using market orders, which is the way most investors buy and sell stocks at the current market price. Instead, he says, investors must use limit orders, which specify a price to buy or sell and can protect them from computers going haywire during high volatility...."

Topics: 2   Posts: 9
Never, ever in the USA at market - always a Limit order. This is also one of J the Cramer's favourite sayings if you can take his show once he is in a "lecture" mode. This is presicely as you said it Stuart - it's protection against haywire computers during high volatility. But we must bare in mind: computers can't do nothing unless somebody tells it what to do -so unscrupulous human tactics are not to be ignored.!

Topics: 13   Posts: 118
What do you mean by "unscrupulous human tactics" ??

Aren't we all just trying to game the system one way or another, sure we call it a trading edge. But the effect is the same?

Topics: 2   Posts: 9
Simon in follow up:
In March 2009, Michael Osinski wrote an article in New York magazine confessing that he'd blown up Wall Street. How? "I wrote the software that turned mortgages into bonds."

My point then is maybe too simplistic but to me still somebody (and who is he?) must tell a computer what to do. How the computer does it we dont know.
My statement also relates to the Goldman Sachs saga from 2009 when a Computer programmer of them was arrested and on bail for $750,000.
Goldman Sachs has confessed some issues to AUSA Joseph Facciponti, who then said that: "The firm does sophisticated, high-speed and high-volume trades on various stock and commodities markets,” and “The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways.” ( It becomes more complicated as accused apparently passed program and codes on in Europe - I think it was Germany)
As a shareholder put it:" Did one of the High frequency trading firms algorithm picked up my shares for four pennies in the second that my stop-loss order was triggered"- and who/what triggered it. They win, you lose not because they are smarter than the average investor. They won because sombody could ?manipulate the stock market through for example high frequency trading (HFT) programs.

Topics: 13   Posts: 118
Antonk, sure and we broadly in agreement ..

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