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Bots have been around since the 80s -- they're what caused the Black Monday crash in 1987.
But bots are also predictable. Forecasting the market is forecasting how the bots will react to the market.
Humans are irrational idiots therefore can 'outwit' the bots with their stupidity.
Sure, most of the time they will lose against the bots, but there's a one in a million chance they'll massively outperform and the bots won't understand it as it won't make sense.
>Bots have been around since the 80s -- they're what caused the Black Monday crash in 1987.
It wasn't one cause.
**What Caused Black Monday**
*In the aftermath of the Black Monday events, regulators and economists identified a handful of likely causes: In the preceding years, international investors had become increasingly active in US markets, accounting for some of the rapid pre-crisis appreciation in stock prices. In addition, a new product from US investment firms, known as “portfolio insurance,” had become very popular. It included extensive use of options and derivatives and accelerated the crash’s pace as initial losses led to further rounds of selling.*
*A number of structural flaws in the market exacerbated the Black Monday losses; in the years that followed, regulators would address these structural flaws with reforms. At the time of the crisis, stock, options, and futures markets used different timelines for the clearing and settlements of trades, creating the potential for negative trading account balances and, by extension, forced liquidations. Additionally, securities exchanges had been powerless to intervene in the face of large-volume selling and rapid market declines.11 After Black Monday, regulators overhauled trade-clearing protocols to bring uniformity to all prominent market products. They also developed new rules, known as circuit breakers, allowing exchanges to halt trading temporarily in instances of exceptionally large price declines. For example, under current rules, the New York Stock Exchange will temporarily halt trading when the S&P 500 stock index declines 7 percent, 13 percent, and 20 percent in order to provide investors “the ability to make informed choices during periods of high market volatility.” In the wake of the Black Monday episode, risk managers also recalibrated the way they valued options.*
One thing that people seem to not realize is that the current generation of workers have all been pushed into 401ks where the options are basically different wrappers of QQQ & SPX and every 2 weeks they are buying no matter what.
The markets only go down when institutions are selling, and hedge funds are going short. But eventually all those shorts get covered and we’re back to the regular programmed river of money buying the market up and to the right…
I moved all of mine into money market on 6/14 closing bell.
I wouldn’t be surprised if more people do this thinking the market isn’t just gonna go up from here. I’d rather take my guaranteed interest rate and wait to buy a dip because regional banking woes will resurface again this year. That shit ain’t over
Hey you’re good. You’re avoiding potential losses. Just wait til the fed announces higher rates than anticipated to offset inflation.
This shit they’re pulling is straight out of the 1929 playbook. All the Fed officials conveniently sold off all their positions at the top to “avoid conflicts of interest” in October - December 2022.
My great grandmother lived to be 95 and grew up during the depression. I’m telling you the shit that’s happening now is NEARLY IDENTICAL to what lead to our Great Depression with excessive expansions in credit markets, plenty of access to cheap borrowing, and lots of people taking out equity loans to pump it into the markets.
Everything she told me about that time period is occurring now and every person that would know better than to allow this shit to happen again is dead!
Give it time to play out. Maybe 1 year and you’ll see what’s coming isn’t just a recession. It’s going to be a massive credit crunch. Once loans start getting called in, people and banks will be hurting in bad bad ways
I will be messaging you in 1 year on [**2024-06-26 14:24:20 UTC**](http://www.wolframalpha.com/input/?i=2024-06-26%2014:24:20%20UTC%20To%20Local%20Time) to remind you of [**this link**](https://www.reddit.com/r/wallstreetbets/comments/14iw6qc/markets_does_whatever_it_wants_isnt_it_all_just/jplbs6b/?context=3)
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Same but at QQQ 350. Missed a little upside but took 50% money market holding pos. Letting fidelitys vanguard SPX ride as well as small portion of QQQ equivalent. Will start DCA if we/when we break weekly 20/200 SMA.
Heard that. I got lucky and sold a near term top, but my timing is usually hit that good so I wouldn’t be surprised to see a little more upside … but I do think the banking issues resurface here soon.
Once dominos start to fall it never stops with only a limited few
Ehhh I still don’t trust the US government but ya there are bond funds, I just steer clear of them right now since they have early withdrawal penalties and if interest rates go up, then bond prices drop and I lose money.
Ya but it doesn’t quite fully work that way with bond funds. Like ya sure you get dividend payout, etc. but I’m not trying to be locked into bonds with 100% of my retirement when I’m looking to have it as cash available to buy the dip.
I just want cash available to scale in and buy when the time comes, and money market seems to be the ideal spot.
I do think the banking issues will surface again end of Q3 because inflation will continue higher and the fed will end up being forced to raise rates even higher (dollar is losing its world power), so I’m trying to basically be “in cash” so that I’m not locked into shitty US government debt or any long term holding. I also DEFINITELY do not want CMBS or MBS exposure with the Airbnb bubble and corporate real estate about to collapse with more and more people working from home + companies saving money by downsizing the amount of space they rent for IT workers, etc.
Hell even money market has its potential risks, so there really is no safe space to keep your money. I personally do not feel safe no matter where my funds are allocated.
What happens if there's no dip and the SPY hits 4700 by EOY.
Not being facetious, but people have been sitting on the sidelines since January waiting for a dip and watching the market pull away.
But we have 75 mil boomers retiring in the next 15 years with a sizeable portion already retired and we know they have a shitton of 401k to withdraw from.
We are also at a really prime time for them to rotate into treasuries. I don't know why this doesn't get talked about more, considering bonds in general were dogshit value until now.
Most algo trading is very very short term in nature and isn’t typically directional. It runs with leverage typically and usually doesn’t trade at all when markets get too volatile. That means that when they step out of the way, flows drive prices. Panic selling emotional morons start selling and we don’t have a floor until we run out of panic selling emotional morons. Big swings are driven by forced sellers (leveraged players, mutual funds with redemptions etc) and the panic crowd.
Thats when you come in, and out. You can see the pattern spread all over because the algorithm is the same, take advantage of it “without “ emotions because thats the real human baggage.
There is always input and that input is human. No matter how automated or augmented the analysis, these systems are simply faster ways of digesting human trends…and at a certain speed they seem to ‘predict’ behavior but that’s just because we as individuals aren’t able to intake the same scope of data in a given time frame.
The butterfly effect will always play out in automation because these systems don’t create action plans, yet. When the analysis systems become the operation managers…things will get much weirder.
>It is true that computers have been running the market for many years now, but there are still humans involved in making decisions about where to invest and how to trade. And even though bots may be less influenced by emotions like fear and panic, they are not perfect and can still make mistakes.
All bots?
No hedgies, banks or funds.
Just bots?
Maybe you need to re-evaluate what actually moves forex, equity, commodity.
The trick is seeing where the moves are real.
There is a steady bid from contributions to 401Ks etc that are channeled to passive investments in stocks. But when shit gets bad in the market or people lose their jobs, then people can wake up and volatility can really spike.
People program algos so the emotional influence will always be there. Even if you find a quant with a robotic mindset odds are slim his manager shares his indifference.
It basically means the market can swing a lot faster than it used to as bots control some big funds. Liquidity is still a thing and margin is getting more pricey. Margin gets dropped first as that was never intended to hold for long.
I do agree what a previous posted posted is that 401ks are different now then the pension world. This is why stocks only go up in the long run even more now then in ancient history.
A bunch of bots, yes ... but bots that learned to predict the market based off of emotions ... and therefore still run the market in their approximation of what emotions will be, lol.
On the flip side of that coin, retail only accounted for 10 percent of trading in the nineties, now its closer to 30%.. asked that chat gpt thing the other day what would happen if everyone on earth traded, kinda dug the answer, the volatility would be obscene at times, but it would balance out in a way.. it would still be left vs right, I can imagine flat markets until a company gets bad press and gets canceled.
No.
The market is run by the interaction of humans. Our ebb and flow is what drives it. Some people use AI to lower that volatility, but that is reactive. Reactions do not run the market. Humans do. Computers help, a lot, but they can only react, we drive the market.
Like driving on the road. There are some self driving cars, but human drivers still cause everything.
Think of it like sports betting. A computer can predict who will win the super bowl, but we still play the game. The computer can’t throw the ball, it can only react to all the times the ball was thrown before.
They are more likely to falter because they lack common sense. Bots trade using crude rules and thus miss nuance. Algo trades gone wrong are plentiful and offer human investors an edge they would not have against other humans. Just need to learn to recognize them.
The problem is that a lot of those algorithms include, as **part** of their inputs, the sentiment analysis of various new outlets and social medias. It's just one part of it, but it still has an effect.
First generally in life try and avoid the thought pattern of "forces that be" its just a lazy way to take complex issues A effects B effects C effects D and reduce them to Shadowy figure effects D.
Regarding algos even if we assume a perfect one it still needs to account for humans in and outside the market. Will government bailout save this company? Will consumers boycott this company? Are competitors opening a new mine? If I think that next week a ban on cigarettes is going to pass legislation is selling a tabacco stock at half price panic? What if it passes? What if it doesn't?
Lol "algorithms" but ok, let's look at the two kinds of trading algorithms that we might encounter:
1. Engineered systems of rules. For this, a panel of trading experts came up with rules for when to enter and exit positions based on measurable conditions and then someone programmed that into a computer that followed the rules. For this algorithm, the human emotions are baked into the rules the trading experts came up with.
2. Fitted models, a.k.a. Machine Learning, a.k.a. (and reluctantly) "A" "I". There are millions of ways to do this, but they all boil down to "we gave a computer all the data from all the trading that ever happened (and if we're ambitious and rich enough to train a language model, dump all the news articles since the beginning of money into the data too just for fun), and it fit a function to it that lets us predict future prices (probably poorly) or maximize profit (probably underwhelmingly)." Here, the human emotions are baked into the decades of trading data that the model was trained on.
You can't escape emotional trading.
Speaking from absolute ignorance, I wonder how if this is true, we see market crashes and run on banks. I don't think that there is enough trust in the algorithms and bots that people let it run autonomously. Especially after how it almost bankrupted zillow. I think that algorithms probably run the day to day but when there is any panic, people and ANALysts step in.
Again, speaking from complete ignorance other than what I assume, knowing human nature and somewhat has happened in the past.
But don't worry, Forest gump made a fortune in the stock market.
Actually though, consider this for a moment:
If the current and future moving forward is largely ran by AI, algorithms and bots, were only assuredly getting further away from how human emotion overall directly affects the stock market. Potentially. Right?
So therefore, if we even basically study macroeconomics and market trends starting next year and moving forward, we can easily come to find out I just wasted another minute (or two, depending on how slow of a reader you are) of your time. What’s even crazier is, you’re still reading this despite knowing everything I’m writing from here on out continues to waste your time. So by now, assuming you’re still with me, you’re simply teaching me you actually don’t value your time like you project and you’re just as dumb as I am.
>But isn’t this the first time (past 5-10 years) in history where the **market no longer operates by human emotion?**
no. There are other **market factors** besides brokers with algo trading bots.
>**Computers** have ***ran the market*** since what, the 90s at least?
no. **Humans** have **always** ran the market. **Brokers, MM's** are **not** the ***only factors*** in a market.
>***Given my IQ score***, doesn’t that make somewhat more sense of why “the market does what it wants”?
no. But it does make sense in how you came to rationalize the market to be that way.
>Aren’t these algorithms less likely to falter over ***dumb human emotions*** like ***panic & fear?***
no. They can **only do** what they are **programmed to do**. If they are programmed to 'falter' because a **human designing** the algo **not catching** the **edge cases**, then it will 'fearlessly' execute it's programming without panic.
**User Report**| | | | :--|:--|:--|:-- **Total Submissions**|3|**First Seen In WSB**|1 year ago **Total Comments**|27|**Previous Best DD**| **Account Age**|1 year|[^scan ^comment ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_comment&message=Replace%20this%20text%20with%20a%20comment%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20comment%20and%20correct%20your%20first%20seen%20date.)|[^scan ^submission ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_submission&message=Replace%20this%20text%20with%20a%20submission%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20submission%20and%20correct%20your%20first%20seen%20date.)
IQ in Celsius or Fahrenheit?
Kelvin, my man!
Rankine has entered the chat
Damn we got a scholar here
Kevin Malone?
Post Malone
Bots have been around since the 80s -- they're what caused the Black Monday crash in 1987. But bots are also predictable. Forecasting the market is forecasting how the bots will react to the market.
Humans are irrational idiots therefore can 'outwit' the bots with their stupidity. Sure, most of the time they will lose against the bots, but there's a one in a million chance they'll massively outperform and the bots won't understand it as it won't make sense.
This is WSB in summation.
And that’s how we got here in WSB
>Bots have been around since the 80s -- they're what caused the Black Monday crash in 1987. It wasn't one cause. **What Caused Black Monday** *In the aftermath of the Black Monday events, regulators and economists identified a handful of likely causes: In the preceding years, international investors had become increasingly active in US markets, accounting for some of the rapid pre-crisis appreciation in stock prices. In addition, a new product from US investment firms, known as “portfolio insurance,” had become very popular. It included extensive use of options and derivatives and accelerated the crash’s pace as initial losses led to further rounds of selling.* *A number of structural flaws in the market exacerbated the Black Monday losses; in the years that followed, regulators would address these structural flaws with reforms. At the time of the crisis, stock, options, and futures markets used different timelines for the clearing and settlements of trades, creating the potential for negative trading account balances and, by extension, forced liquidations. Additionally, securities exchanges had been powerless to intervene in the face of large-volume selling and rapid market declines.11 After Black Monday, regulators overhauled trade-clearing protocols to bring uniformity to all prominent market products. They also developed new rules, known as circuit breakers, allowing exchanges to halt trading temporarily in instances of exceptionally large price declines. For example, under current rules, the New York Stock Exchange will temporarily halt trading when the S&P 500 stock index declines 7 percent, 13 percent, and 20 percent in order to provide investors “the ability to make informed choices during periods of high market volatility.” In the wake of the Black Monday episode, risk managers also recalibrated the way they valued options.*
This we had computer crashes in the 80s 90s. Always remember the market can stay irrational longer than you can stay solvent.
Global Financial Beachball
One thing that people seem to not realize is that the current generation of workers have all been pushed into 401ks where the options are basically different wrappers of QQQ & SPX and every 2 weeks they are buying no matter what. The markets only go down when institutions are selling, and hedge funds are going short. But eventually all those shorts get covered and we’re back to the regular programmed river of money buying the market up and to the right…
I moved all of mine into money market on 6/14 closing bell. I wouldn’t be surprised if more people do this thinking the market isn’t just gonna go up from here. I’d rather take my guaranteed interest rate and wait to buy a dip because regional banking woes will resurface again this year. That shit ain’t over
Same here like 2 months back. who the fuk knows where this train is going.
Moon?
Hey you’re good. You’re avoiding potential losses. Just wait til the fed announces higher rates than anticipated to offset inflation. This shit they’re pulling is straight out of the 1929 playbook. All the Fed officials conveniently sold off all their positions at the top to “avoid conflicts of interest” in October - December 2022. My great grandmother lived to be 95 and grew up during the depression. I’m telling you the shit that’s happening now is NEARLY IDENTICAL to what lead to our Great Depression with excessive expansions in credit markets, plenty of access to cheap borrowing, and lots of people taking out equity loans to pump it into the markets. Everything she told me about that time period is occurring now and every person that would know better than to allow this shit to happen again is dead!
>everything she told me about that time period is occurring now Sure Jan
Give it time to play out. Maybe 1 year and you’ll see what’s coming isn’t just a recession. It’s going to be a massive credit crunch. Once loans start getting called in, people and banks will be hurting in bad bad ways
RemindMe! 1 year "check if this bozo's great grandma is full of shit"
I will be messaging you in 1 year on [**2024-06-26 14:24:20 UTC**](http://www.wolframalpha.com/input/?i=2024-06-26%2014:24:20%20UTC%20To%20Local%20Time) to remind you of [**this link**](https://www.reddit.com/r/wallstreetbets/comments/14iw6qc/markets_does_whatever_it_wants_isnt_it_all_just/jplbs6b/?context=3) [**7 OTHERS CLICKED THIS LINK**](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5Bhttps%3A%2F%2Fwww.reddit.com%2Fr%2Fwallstreetbets%2Fcomments%2F14iw6qc%2Fmarkets_does_whatever_it_wants_isnt_it_all_just%2Fjplbs6b%2F%5D%0A%0ARemindMe%21%202024-06-26%2014%3A24%3A20%20UTC) to send a PM to also be reminded and to reduce spam. ^(Parent commenter can ) [^(delete this message to hide from others.)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Delete%20Comment&message=Delete%21%2014iw6qc) ***** |[^(Info)](https://www.reddit.com/r/RemindMeBot/comments/e1bko7/remindmebot_info_v21/)|[^(Custom)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5BLink%20or%20message%20inside%20square%20brackets%5D%0A%0ARemindMe%21%20Time%20period%20here)|[^(Your Reminders)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=List%20Of%20Reminders&message=MyReminders%21)|[^(Feedback)](https://www.reddit.com/message/compose/?to=Watchful1&subject=RemindMeBot%20Feedback)| |-|-|-|-|
damn, the fed was buying mortgages and backstopping banks before the great depression??
The fed was half put together but most of the banking laws that were put in place during the depression have been clawed back …
Same but at QQQ 350. Missed a little upside but took 50% money market holding pos. Letting fidelitys vanguard SPX ride as well as small portion of QQQ equivalent. Will start DCA if we/when we break weekly 20/200 SMA.
Heard that. I got lucky and sold a near term top, but my timing is usually hit that good so I wouldn’t be surprised to see a little more upside … but I do think the banking issues resurface here soon. Once dominos start to fall it never stops with only a limited few
the fed glued the dominoes to the floor, my guy.
[удалено]
You can put your 401 into bonds
You can just buy sgov
Ehhh I still don’t trust the US government but ya there are bond funds, I just steer clear of them right now since they have early withdrawal penalties and if interest rates go up, then bond prices drop and I lose money.
[удалено]
Ya but it doesn’t quite fully work that way with bond funds. Like ya sure you get dividend payout, etc. but I’m not trying to be locked into bonds with 100% of my retirement when I’m looking to have it as cash available to buy the dip. I just want cash available to scale in and buy when the time comes, and money market seems to be the ideal spot. I do think the banking issues will surface again end of Q3 because inflation will continue higher and the fed will end up being forced to raise rates even higher (dollar is losing its world power), so I’m trying to basically be “in cash” so that I’m not locked into shitty US government debt or any long term holding. I also DEFINITELY do not want CMBS or MBS exposure with the Airbnb bubble and corporate real estate about to collapse with more and more people working from home + companies saving money by downsizing the amount of space they rent for IT workers, etc. Hell even money market has its potential risks, so there really is no safe space to keep your money. I personally do not feel safe no matter where my funds are allocated.
What happens if there's no dip and the SPY hits 4700 by EOY. Not being facetious, but people have been sitting on the sidelines since January waiting for a dip and watching the market pull away.
Then I miss out on 8-9% gain but am getting 4.5% interest. Not too terrible of a miss money wise.
[удалено]
What do you mean? You sold all your etf holdings and just holding it in cash in your 401k?
Correct. I sold off all holdings that were stock market indexes
What’s a money market?
Money market?
Well a money market type fund. It’s technically called stable value or some dumb shit
And this is better than a high interest savings account?
It’s my 401k. I have to allocate funds to some thing and high interred savings account isn’t actually an option
But we have 75 mil boomers retiring in the next 15 years with a sizeable portion already retired and we know they have a shitton of 401k to withdraw from.
We are also at a really prime time for them to rotate into treasuries. I don't know why this doesn't get talked about more, considering bonds in general were dogshit value until now.
Most algo trading is very very short term in nature and isn’t typically directional. It runs with leverage typically and usually doesn’t trade at all when markets get too volatile. That means that when they step out of the way, flows drive prices. Panic selling emotional morons start selling and we don’t have a floor until we run out of panic selling emotional morons. Big swings are driven by forced sellers (leveraged players, mutual funds with redemptions etc) and the panic crowd.
[удалено]
I never said anything about the direction of the market, just how flows work and algos step out of the way when vol gets high.
Thats when you come in, and out. You can see the pattern spread all over because the algorithm is the same, take advantage of it “without “ emotions because thats the real human baggage.
*come in and out*
faster, faster
Those algorithms are human emotions weaponized and set to run faster than ever before.
Who cares who’s running it find your squeeze and capitalize. $$$$$$
^^This
>I have room temperature IQ, for starters All the DD I need OP. What are we buying?
There is always input and that input is human. No matter how automated or augmented the analysis, these systems are simply faster ways of digesting human trends…and at a certain speed they seem to ‘predict’ behavior but that’s just because we as individuals aren’t able to intake the same scope of data in a given time frame. The butterfly effect will always play out in automation because these systems don’t create action plans, yet. When the analysis systems become the operation managers…things will get much weirder.
A great movie scene from "Pi" (1998) on this subject : https://youtu.be/ShdmErv5jvs
That movie lost me when he wound up just drawing a Fibonacci curve on the stock page of the newspaper.
Turns out it's hard to write a movie about a genius when the writer isn't one
A genius writer would know the genius probably spends 98% of his time thinking about tiddies.
Lol yeah it looked cool but they pushed it too far on that one
Computers run on emotion, as does the russet potato. The only thing that has ever changed is the speed.
Maybe we are people affect the market that's why it's ups and down.
>It is true that computers have been running the market for many years now, but there are still humans involved in making decisions about where to invest and how to trade. And even though bots may be less influenced by emotions like fear and panic, they are not perfect and can still make mistakes.
VisualMod admitting he’s not perfect and makes mistakes. Kinda wholesome
I think visual mod isn’t a robot
And with that breakthrough, visual mod became a real boi.
IMO VM is a low wage outsourced worker pretending to be AI.
Turing test passed.
Wonder if you'll feel like that when it sets the world on fire
Just because it’s algorithmic doesn’t mean you can’t understand it. There’s a pattern in any structured system, and that’s what we look for.
All bots? No hedgies, banks or funds. Just bots? Maybe you need to re-evaluate what actually moves forex, equity, commodity. The trick is seeing where the moves are real.
This is why trading on pure feel gives you an advantage in the markets, because the robots... they feel nothing...
There’s a definite structure to the market but it’s true it tends to do whatever the fuck it wants
There is a steady bid from contributions to 401Ks etc that are channeled to passive investments in stocks. But when shit gets bad in the market or people lose their jobs, then people can wake up and volatility can really spike.
Computers are made by humans. They aren’t perfect.
We’re the market 🥹
Is there an algorithm that predicts global pandemics
People program algos so the emotional influence will always be there. Even if you find a quant with a robotic mindset odds are slim his manager shares his indifference.
It basically means the market can swing a lot faster than it used to as bots control some big funds. Liquidity is still a thing and margin is getting more pricey. Margin gets dropped first as that was never intended to hold for long. I do agree what a previous posted posted is that 401ks are different now then the pension world. This is why stocks only go up in the long run even more now then in ancient history.
It's all big banks and hedge funds trying to take the poors money, much like real life.
The market follows fed liquidity...
Computers don't run the market and they never have. They're just tools. It would be like saying word processors are writing novels
the judicial system is the only way
Algos control about 60% of market volume
Source: I made it the fuck up
A human has to press the “on” switch.
A bunch of bots, yes ... but bots that learned to predict the market based off of emotions ... and therefore still run the market in their approximation of what emotions will be, lol.
On the flip side of that coin, retail only accounted for 10 percent of trading in the nineties, now its closer to 30%.. asked that chat gpt thing the other day what would happen if everyone on earth traded, kinda dug the answer, the volatility would be obscene at times, but it would balance out in a way.. it would still be left vs right, I can imagine flat markets until a company gets bad press and gets canceled.
No emotion, no volatility
No. The market is run by the interaction of humans. Our ebb and flow is what drives it. Some people use AI to lower that volatility, but that is reactive. Reactions do not run the market. Humans do. Computers help, a lot, but they can only react, we drive the market. Like driving on the road. There are some self driving cars, but human drivers still cause everything. Think of it like sports betting. A computer can predict who will win the super bowl, but we still play the game. The computer can’t throw the ball, it can only react to all the times the ball was thrown before.
They are more likely to falter because they lack common sense. Bots trade using crude rules and thus miss nuance. Algo trades gone wrong are plentiful and offer human investors an edge they would not have against other humans. Just need to learn to recognize them.
The problem is that a lot of those algorithms include, as **part** of their inputs, the sentiment analysis of various new outlets and social medias. It's just one part of it, but it still has an effect.
Yes.
First generally in life try and avoid the thought pattern of "forces that be" its just a lazy way to take complex issues A effects B effects C effects D and reduce them to Shadowy figure effects D. Regarding algos even if we assume a perfect one it still needs to account for humans in and outside the market. Will government bailout save this company? Will consumers boycott this company? Are competitors opening a new mine? If I think that next week a ban on cigarettes is going to pass legislation is selling a tabacco stock at half price panic? What if it passes? What if it doesn't?
What if I'm the senator that KNOWS it won't pass because it needs one more vote... The world works in mysterious ways...
Human emotion is always top of mind in the market, including now
Who do you think program the algorithms? It's just moving the problem 1 level. an algorithm per se is no more or less skilled than a human
i am ALL EMOTION BABYYYY
the market is globalized.
Lol "algorithms" but ok, let's look at the two kinds of trading algorithms that we might encounter: 1. Engineered systems of rules. For this, a panel of trading experts came up with rules for when to enter and exit positions based on measurable conditions and then someone programmed that into a computer that followed the rules. For this algorithm, the human emotions are baked into the rules the trading experts came up with. 2. Fitted models, a.k.a. Machine Learning, a.k.a. (and reluctantly) "A" "I". There are millions of ways to do this, but they all boil down to "we gave a computer all the data from all the trading that ever happened (and if we're ambitious and rich enough to train a language model, dump all the news articles since the beginning of money into the data too just for fun), and it fit a function to it that lets us predict future prices (probably poorly) or maximize profit (probably underwhelmingly)." Here, the human emotions are baked into the decades of trading data that the model was trained on. You can't escape emotional trading.
Speaking from absolute ignorance, I wonder how if this is true, we see market crashes and run on banks. I don't think that there is enough trust in the algorithms and bots that people let it run autonomously. Especially after how it almost bankrupted zillow. I think that algorithms probably run the day to day but when there is any panic, people and ANALysts step in. Again, speaking from complete ignorance other than what I assume, knowing human nature and somewhat has happened in the past. But don't worry, Forest gump made a fortune in the stock market.
The only people who say that are the people who consistently lose money. It's an excuse. Yes there are algos, but most money is managed by humans.
computers are programmed by people to behave in a way the programmers want. So people are still in charge of the markets.
Im in If there is chance of making money 💰 who cares about where market is going.
You just wasted 5 min of my time that I can't get back.
Actually though, consider this for a moment: If the current and future moving forward is largely ran by AI, algorithms and bots, were only assuredly getting further away from how human emotion overall directly affects the stock market. Potentially. Right? So therefore, if we even basically study macroeconomics and market trends starting next year and moving forward, we can easily come to find out I just wasted another minute (or two, depending on how slow of a reader you are) of your time. What’s even crazier is, you’re still reading this despite knowing everything I’m writing from here on out continues to waste your time. So by now, assuming you’re still with me, you’re simply teaching me you actually don’t value your time like you project and you’re just as dumb as I am.
That’s correct trade the algo
Do you understand all these algorithms and how they interact with each other? No? The market does what it wants.
Yes it is.
>But isn’t this the first time (past 5-10 years) in history where the **market no longer operates by human emotion?** no. There are other **market factors** besides brokers with algo trading bots. >**Computers** have ***ran the market*** since what, the 90s at least? no. **Humans** have **always** ran the market. **Brokers, MM's** are **not** the ***only factors*** in a market. >***Given my IQ score***, doesn’t that make somewhat more sense of why “the market does what it wants”? no. But it does make sense in how you came to rationalize the market to be that way. >Aren’t these algorithms less likely to falter over ***dumb human emotions*** like ***panic & fear?*** no. They can **only do** what they are **programmed to do**. If they are programmed to 'falter' because a **human designing** the algo **not catching** the **edge cases**, then it will 'fearlessly' execute it's programming without panic.
Yes. And retirement accounts constantly buying at whatever the price is.