Will AI and Algo Trading Bots Replace a Human Trader ?

This kind of a question is with us in one form or another , for as long as Human Civilization exists.

First Plough, first Steam machine, first Electric bulb, first Computer …..million “First” things human invented and developed.

And it was always Fear and Unbelief first.

Personally I am within the group of people to whom Roomba is the end of the line when it comes to robots. No self driving cars ( no electric cars for that matter as well ) , no Trading Bots, no AI of any sort….Still I will try to be objective in this article.

So what is the Ai and Algo Trading Bot ?

The AI

First of all, you have to be aware that AI is not a Bot or any kind of mechanical tool – it is supposed to be The All Knowing , Self reliant , Self conscious Entity , that will help us do our jobs, develop quicker and more efficient , and ultimately replace the computers that we know today.

And how far are we from the Day of The New Dawn ?

Well, it depends on who you ask , as long as you don’t ask those trying to promote the idea, collect funds for development of it and in any kind connected to business around AI creation.

In my opinion, not even close….but that’s just me…born cynic .

But what if they really make it ??? Would it be able to replace Human Traders in the global markets ?

The answer is very simple : No.

Why not ??? Simply because AI has to learn, and it does two ways :

Programmers that are creating it are teaching it
It collects enormous data from the net

Do tell me which programmer knows anything about the markets ??

Also tell me that gazillion information on the net is accurate, correct and not misleading ( do not forget who wrote those…definitely not some super intelligent alien species )

So we have already hit the wall when it comes to AI replacing Human in Trading….Even if you seriously believe that they are close to producing one…

Of course you are free to believe whatever you like, listen to every single word that are spit out by those money grabbing sharks behind the development of AI , be it private or government based.

Just look at those Writing AI’s – have you ever seen a text that has any real sense, feeling, correctness or merit wrote by one ?

Nuff said.

But how about Algo Trading Bots ?

Are they any good, can they be better than Human ?

Let me first give you a short description what the Algo Trading Bot is .

The Algo Trading Bot

Algo trading bots, or algorithmic trading robots, are computer programs that use complex algorithms to rapidly buy and sell instruments on the financial markets. Today, over 70% of all trades are made by algo bots.

Trading bots have the potential to generate profits for traders by automating the trading process and capitalizing on market opportunities. However, their effectiveness depends on various factors, including market conditions, strategy effectiveness, risk management, and technology infrastructure.

So what is wrong with this picture ?

First of all, I believe that you are all aware that as much as 90% of all traders lose money, so all that crap – complex, rapidly, over 70% of all trades today….does that sound logical to you if Algo Bots are any good ?

Just think for yourself…I am not implying anything here…pure facts.

And Second Paragraph – Have the potential – HOWEVER ….and the rest we all know all too well – market conditions, strategy, risk /reward….No bots needed to tell us that.

There are great explanations why they are better than us, like they can’t make a mistake buying instead of selling ( believe me when I tell you that I did make a mistake or two of a kind, but went out with a little profit after all) .

They are faster than us – maybe , but does that really matter as we have to trade based on the full strategy and not a blink of an eye, not to mention the limits in on line speed – trading over 1Gbps optical , but my broker is half a world away….

And most important one – who makes these bots ?? Traders …I don’t think so…

So again some little nerd in his/her basement , trying to become a new Bill Gates…knowing nothing when it comes to the markets.

And where is the Thrill of the Hunt there ?

If you are really in trading, only because of the money I have to break that dream of yours – you’ll never make it.

Reason is that this is so complex and difficult game, with so much giving, learning, surviving and passion , that only those born for it and ready to sacrifice a lot can handle it.

Bot or no Bot, without the guts, feeling , knowledge and passion , you are doomed to fail.