On the future of day trading
I think everyone should read Richard’s post about the importance of traders keeping up with technology (and what this may mean). I agree 100% with everything he says. I’m too lazy to write a long, nicely structured post like he does and that’s part of the reason why I like Move the Markets – he’s not. He is also a pretty smart dude.
Up to now, we are mainly talking about computerized trading agents that are somewhat better than good human traders. If you fast-forward a bit, it gets much worse for the poor unassisted human. You see, as computers continue to gain speed and cognitive ability, the divide between them and plain old humans will continue to widen. So maybe earlier you felt like a high school basketball player playing in an NBA game. If you are one of the few very talented, you could probably still compete. Eventually, though, you will feel like my cat playing in an NBA game…. fearful of all the strange action and unable to comprehend what’s really going on.
I can imagine a future market where the only exploitable edges left have more features to consider than the human brain can easily process at once (see any cognitive psychology textbook for more about these limitations). At this point, the unassisted human literally cannot identify the opportunities in time to take advantage of them.
