I received this question from a guy, who was interested in the impact of algo trading.
And who was fearing for his survival as a manual trader.
There is all this talk about how algos are the end for manual traders.
Here's why you should not fear algos/automated trading:
I have heard this argument for many years. Some believe that algos will rule trading and eliminate the manual trader...
... yet we and many other traders are still trading profitably.
Of course, you must improve your game and be more selective with your trading.
And if you are, there are still many plays where you will have an edge.
A lot of algos are written by programmers who have not learned how to actually trade and thus are destined to fail.
You can’t just crunch numbers and expect to be a profitable trader.
As mankind has proven over and over:
Human emotion will trump even the best of automated intentions.
Algos will continue to become more used. And there is a fortune to be made in using them.
But there isn’t a program that can be developed and which will be set-and-forget. No algos will work until the end of your days.
Just like no manual trading strategy will work forever.
There are just too many variables in the markets.
Respect algos. But don't fear them. In fact, instead of being fearful, embrace it.
Use the new developments in the market space, such as algos, to improve as a trader.
Learn more about how it works.
And if you can’t beat them, join them.
It’s not a law that you can only do manual trading OR algo trading.
With the right mindset, you can do both.
