Concern about effect of Algo trading

As we know technology is getting better and better every day & Algo trading is slowing gaining popularity so going forward to future where a majority of the fund house’s using Algo to execute trade’s and they have a large amount of money which means they can more accurately execute trade’s .so my question is can a day trader become successful in such a market condition and can he/she have an edge

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Answered this earlier,

A program is only as good as the programmer behind it, who is again a human. If you try to trade high frequency or other such strategies where latency (faster spotting the trade and execution) is important, you’d definitely lose out to a program. But if not, manual trading still works and will maybe continue working for a while.

That said, even before computers and programs, all manual strategies also had the same issue of not working with time as more people adopted it. This business of trading is extremely competitive and people go to great lengths to get an edge over others - with or without computers.


If you mind is your brother pure discretionary trader
? I mean not when you guys started but rather now when you are managing huge sums .
And what are your view on quants ,not from algo point of view but as a strategy to predict market moves.

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By algo if you mean one of those high-frequency trading types, no, Nik doesn’t do that. He might be using algos to get better execution (which u need when trading large quantities), but trading decisions are mostly discretionary (while being rule-based and programs suggesting opportunities).

While many think trading is about predicting market moves, it isn’t. It is mostly about being disciplined and proper risk management. That is where folks who are systematic (use programs) have an edge over those who don’t. But that doesn’t mean those who use algos (quants as u just called) can’t be undisciplined. Like I said earlier, a program is only as good as the programmer behind it.