AI Trader: Why Not Permit Stock Software do the Trading for You?

May 5th, 2009

For someone completely innocent of what the ruckus is about, a major shift in trend in stock market figures causing a major fit of joy or despair for stock traders is both amusing and mysterious. For a neophyte wanting to engage in stock trading a scene reminiscent of stock market crashes would indeed be intimidating. There have been many people who thought investing in buying and selling stocks could be their quick cash solution only to be disappointed in various measures. Even more so daunting to the stock greenhorn should be the poignant fact that the world is still in the ruthless clutches of recession, and a number of large companies have already suffered tragic fates, a few more are barely hanging on. 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. Maybe that would work for him. Or perhaps not.
There have been a number of theories and hypotheses trying to figure out the dynamics of the severe numbers game that is 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 stock market books 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 isn’t unknown that over or under reaction can cause undue over or under pricing of stocks or dividends. However he wants to proceed, he’ll have to tread a path or combination of paths hailed from contemporary theories about the stock market. A computer program, a stock software, can be indeed based on one or many of these existing theories and foundations, and logical decision making is a computer’s forte. But sometimes the stock market is less logical and more irrational, more radical and less predictable. 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.
Stock software would definitely make good assistants in that they can accurately gather and organize information, but what to do with that data or any forecasts garnered from it should be human decision. There are few people anyway who’d their let computers risk their hard earned money.