Does Automated Stock Trading Software Work For Individuals?Can the individual use - or trust - automated stock trading software? For your author, there is little point in trying to fake expertise here - finding someone that uses automated stock trading software is very difficult. Your author is friends with around a dozen investment bankers. They are not the titans that we occassionally see on TV news, but instead they are the guys and girls that do the work on the telephone - making trades and doing deals. Having discussed their work at some length, none of these people uses automated stock trading software. In fact, they all fear such a potential development! Why? Because they all earn good to great salaries for providing their own human input. Taking away that input will take away their job. Not nice.
It seems that fund management groups set their programs to sell at certain price levels. As these levels were met, stock was literally dumped into the market. This forced the price to fall further which triggered more sell orders and more dumping of massive amounts of stock. Since this was being done by multiple funds and companies simultaneously, this was a non-stop spiral downwards for the market. The market was actually closed to prevent total meltdown. So that is the downside, but on the upside, a lot has changed since 1987. The major fund management firms have improved their trading plans, software has become much more sophisticated which enables far greater analysis to the firms and regulators have put in place rules and principles to - hopefully - prevent this from happening again. The market, of course, has changed too. Index tracker funds are very popular with the general investing public and the majority of these funds follow the market with automated stock trading software.
There is also a "halfway house" which is known as portfolio tilting . This enables fund managers to have some human input into a portfolio but the majority of the work is pre-programmed. Software of this nature is obviously not free, or cheap. The big money managers spend incredible amounts of money on analysis and testing to ensure their systems do a good job. This means that they guard their intellectual property very closely. After all, if you could automate making tons of money, would you want to share? No? Really... For this reason, your author has never seen a commercially available automated stock trading software system. Quite possibly, there never will be one. Should one become available though, it is unlikely that the average man will be in a position to afford it. That means that for now, making money in the stock market needs to be worked at and studied.
We Recommend: Finance Blog | Trading Software | Find Stockbrokers Return To Our Homepages: Stock Market | Investment-For-Beginners |