The Option Alpha Podcast 230: An Evolutionary Perspective on Why Autotrading Will Dominate
Jul 19, 2023
Dive into the fascinating world of automated trading, exploring how cognitive biases hinder human decision-making in volatile markets. Discover the three forces driving autotrading's rise: collapsed latency, expanded choices, and the necessity for agility. Learn how technology democratizes trading and contributes to better risk management. Kirk argues that automation empowers traders by eliminating emotional pitfalls and allowing faster exploitation of market inefficiencies. Get ready for a revolutionary shift in how we approach investing!
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Episode notes
Investing Is A Risk Bridge
- Investing is taking a calculated risk today to reach an uncertain future outcome.
- The hard part is the journey across the risk chasm where most investors fail due to holding and managing positions.
Math-Based Trading Removes Middle-Game Failure
- Auto trading uses math, data and probabilities to remove human error from execution.
- Kirk argues this approach will increasingly dominate because humans struggle with the journey between trade entry and outcome.
Adopt Automation To Match Collapsed Latency
- Do adopt automation because latency has collapsed and markets reprice almost instantly.
- Use systems that continuously monitor information since opportunities appear and vanish very quickly.