How effective is automated trading?
Do you remember the TV series Lost in Space and in
particular do you remember the name of the robot? If you
answered "Robby" you are totally incorrect. I will tell you
why a little later.
During the 1950s many scientists and engineers were working
on the development of robotics and there were a good many
science programs and documentaries that lead us to believe
that we would by the 21st Century have most of our menial
work carried out by robots.
In November, 1971, a company called Intel publicly
introduced the world's first single chip microprocessor,
the Intel 4004 (U.S. Patent #3,821,715), invented by Intel
engineers Federico Faggin, Ted Hoff, and Stan Mazor.
This invention would be crucial to the development of
robotics, and indeed today there are "robot controls" in
more areas of our life than we may imagine. A good deal of
our menial factory work is indeed carried out by robots '
and they do an exceedingly good job.
Yet despite the gargantuan progress in the development of
robotics, I still do not have a robot that can stand behind
me as I consider placing a trade who will shrill out
"WARNING, WARNING, WARNING" whilst waving it's arms in the
air. Nor is any of the housework undertaken by robot in my
house - and there is a reason for this.
Even the most mundane task around the house requires an
extraordinary amount of decision making. Just because we do
not consider plugging in a vacuum cleaner to be difficult,
it belies the amount of brain function required to achieve
that "simple" exercise.
I have, over the years, experimented with many automated
trading systems and my personal experience has been very
disappointing. Since no one has yet managed to develop a
robot that can carry out some very routine household tasks
' should I be surprised to find that there doesn't appear
to be a robot that can make the very exacting and varied
judgement calls required of the forex trader?
There are of course automated trading aids that can enter a
trade when a set of pre-defined criteria is met, but that
is a long haul from fully automated trading.
Traders often ask me about "set it and forget it" fully
automated trading systems as if such systems were a
reality. Be assured that they do not yet exist. If they
did, I for one would be using one to make money while I
went out and played golf instead of sitting in front of my
PC for hours each day.
If such systems actually existed there would be no "Trading
Houses" employing analysts and traders, just rooms full of
PCs automated to make money.
How many banking institutions would have closed their
investment departments and dismissed their staff in favour
of such automation?
No, I am afraid that like the Robison family, automated
trading is - at least for the foreseeable future - Lost in
Space. So for those of you who want to make money from
trading on the foreign exchange I guess that like yours
truly, you will need to keep on studying those charts.
Oh, and for those of you that are still wondering about the
name of the robot........
The original television series NEVER gave the robot a name,
so it is simply referred to as "Robot." Dick Tufeld
provided the voice and actor Bob May actually "worked" the
Robot from inside. Many people mistakenly call the robot
"Robby" -- which is actually the name of the robot from the
1956 movie "Forbidden Planet."
Both robots, strangely enough, were designed by the same
man -- Robert Kinoshita.
----------------------------------------------------
Martin Bottomley is a full time professional forex trader,
acknowledged author, forex tutor and co-developer of forex
trading software including The Amazing Stealth Forex
Trading system.
You will find more information at:
http://www.stealthforex.com
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