IEEE Future Directions
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In a comprehensive list of jobs at risk of automation brokerage clerks have a 99% probability of seeing their job disappearing in the next 10 years. Ok. but that is about clerks… Financial Advisors have to be way smarter and in that list they are considered to have ONLY 58% of probability to hand over their jobs to computers.
That is bad, but actually, it may be worse. Just few days ago a new version of an Automated Equity Trader using Watson has been put into service by EquBot and so far it is outperforming human traders.
Automation on the stock exchange is not new, but this is the first time that a bot reasoning like a human investor is at work. Why would such a bot be any better if it is using the same reasoning of a human trader?
Well, that is because:
- it can consider many more aspects and gather massive information
- it is way faster in te analyses
- it keeps learning and it never forget
- it doesn’t get tired and make mistake out of fatigue.
I do have, however, some general doubts.
The world of finance (my apologies to the financial gurus) is a zero gain game. If someone if making money someone else (in the short of long run) is losing it. Good traders are the ones that find ways to exploit the weakness of other players and bring the money to their pockets.
Bots can benefit from faster decision processes and from more insight deriving from the capability to access and compute more data, hence it is not surprising they can beat, eventually, humans. However, it can be foreseen that once this supremacy is established human trading will just disappears (since as a human you will keep losing) and the battle will be among bots. As they will learn faster and faster we might reach a point where nobody can win anymore…. What will happen to the trading as we know it?
