The two worst things about trading


…or why automation is so attractive

Matt Levine has a great newsletter at Bloomberg. It’s mostly about finance industry news and once in awhile it touches on forex.

Today he nailed what’s so attractive about automated trading.

There has been a lot
written recently about how the business model of high-frequency trading isn’t
as lucrative as it used to be, but I must say that at its core it is a very
appealing business model. Its two main features are:

1.You automate the
trading, so you don’t have to do it; and

2.You get in and out of
positions very quickly, so you don’t have to take much risk.

The two main
stressors of most jobs, it seems to me, are work and risk; if you can program a computer to do
the work and avoid the risk then you have yourself a nice little business.

That’s a great take, but it also touches on two things truths: Avoiding hard work and struggling to manage risk are the undoing of most traders. You have a better chance of mastering discipline than you do of writing a risk-free, money-printing algo.


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