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Dark Pools: High-Speed Traders, A.I. Bandits, and the Threat to the System
Posted: Mon Jul 16, 2012 8:04 am
by MachineGhost
A little melodramatic in the title, but this book gives an engaging story of the rise of electronic trading and electronic networks (one lone geek
literally took on Wall Street's cronyism and changed the world) up until today's current morass of high speed, high frequency AI bots warring it out with each other.
If there is ever going to be a Judgement Day for the rise of the machines ala
The Terminator, I betcha this environment will be its pond scum origins.
http://www.amazon.com/Dark-Pools-High-S ... 0307887170
Re: Dark Pools: High-Speed Traders, A.I. Bandits, and the Threat to the System
Posted: Wed Sep 12, 2012 1:58 pm
by smurff
Check out this video of the rise of high frequency trading since 2007. Put on your flame-retardant sunglasses; the action gets brighter and brighter over time.
http://www.nanex.net/aqck/2804.html
Re: Dark Pools: High-Speed Traders, A.I. Bandits, and the Threat to the System
Posted: Wed Sep 12, 2012 5:14 pm
by notsheigetz
Until I invested in the PP I never paid close attention to daily movements in the markets (and now that I have been it long enough I still don't). When I did watch however, I was surprised by the sudden daily swings between the 4 sectors of the PP. I couldn't believe this could be caused by mere human beings making investment decisions. From my own career in software development I know very well that computers can be programmed to make foolish decisions and act on them with lightning speed without fear of consequences so I suspected this was the culprit.
Re: Dark Pools: High-Speed Traders, A.I. Bandits, and the Threat to the System
Posted: Sun Sep 23, 2012 12:30 am
by MachineGhost
A good follow-up to this book is
Automate This: How Algorithms Came to Rule Our World which broadens out the time frame and industries that algorithms are displacing pesky, inefficient humans full of hubris in.
http://www.amazon.com/Automate-This-Alg ... 591844924/
I find it amazing the first fully automated trading algorithm on Wall Street was first implemented way back in 1977. They used a mechanical contraption to "type" the orders into a NASDAQ terminal as fast as possible to stay legal.
Re: Dark Pools: High-Speed Traders, A.I. Bandits, and the Threat to the System
Posted: Fri Sep 28, 2012 6:23 am
by MachineGhost
Another good followup on this subject looks to be
The Signal and the Noise: Why So Many Predictions Fail - But Some Don’t by Nate Silver of FiveThirtyEight fame.
http://www.amazon.com/The-Signal-Noise- ... 59420411X/