AI Trader: Should You Let Stock Computer Programs do the Trading for You?

May 10th, 2009

It would be confusing and interesting at the same time to see a bunch of stock traders explode in delight or disbelief because of sudden movement in stock market figures, especially for someone utterly unacquainted with such matters. For a neophyte wanting to engage in stock trading a scene reminiscent of stock market crashes would indeed be intimidating. Many have already been taught the hard way that stock trading isn’t just a quick way to earn cash. But then all that is just a prelude to the fact that today’s unrelenting economic and financial recession has already claimed many companies victim, while hunting for some more. A new phase of economic and financial history ushers in a new phase of volatile trending, so even if perhaps the newbie has been extensively versed in past trends he is still up for a few surprises. Or maybe he should just leave it all to a stock software AI trader that collects and organizes data, analyzes it, and then calls its shots based on the relative data? Stock program can be a valuable tool to any trader. Perhaps that is his answer. But then again, maybe not.
There are a numerous theories and hypotheses that account for the workings of the stock market. A stock trader may already be unwittingly abiding by the rules of some of them. He could opt for technical analysis wherein only statistical data hefts weight when he tries to foretell how the stock market would go. In this instance business book reviews might be helpful resources. Or he can go for fundamental analysis which takes into account not just statistical data but also the companies involved, its nature, and even its competitors. Or if he’s done trading by instinct in the past, he might want to see things in a more human or psychological point of view. It’s a fact that at times over or under pricing can result from human over reaction or under reaction. However he wants to proceed, he’ll have to tread a path or combination of paths hailed from contemporary theories about the stock market. In retrospect, a stock software can be based on some or many principles of contemporary theories and hypotheses, and it is true that a computer is the first one to make the most logical decision. And yet there are times that the stock market is more unpredictable than otherwise, more illogical than we’d want it to be. In these instances it might be better to trust your gut rather than stock option software. Also, stock trading programs are yet to be able to comprehend the human psyche behind stock market movement.
All in all, stock software would make wonderful additions to a trader’s arsenal with regards to data observation, gathering, and analysis. Besides, there are few who’d let their computers run their money.