So where do we go from here? We humans were vehicles for the first replicator and copying machinery for the second. What will we be for the third?This phrasing is similar to the old joke "A chicken is an egg's way of making another egg".Yes, there are more web pages out there than people. No, that doesn't mean the web pages win.
"[High-frequency trading] is where all the money is getting made," said William H. Donaldson, former chairman and chief executive of the New York Stock Exchange and today an adviser to a big hedge fund. "If an individual investor doesn’t have the means to keep up, they’re at a huge disadvantage."So Algorithmic trading does a lot of buying and selling today, few/no humans needed (except for spending all that sweet surplus money!). And Genetic algorithms are already at work in all sorts of fields.
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[A]s new marketplaces have emerged, PCs have been unable to compete with Wall Street’s computers. Powerful algorithms — "algos," in industry parlance — execute millions of orders a second and scan dozens of public and private marketplaces simultaneously. They can spot trends before other investors can blink, changing orders and strategies within milliseconds.
High-frequency traders often confound other investors by issuing and then canceling orders almost simultaneously. Loopholes in market rules givehigh-speed investors an early glance at how others are trading. And their computers can essentially bully slower investors into giving up profits — and then disappear before anyone even knows they were there.
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posted by homunculus at 2:40 PM on July 31, 2009