I’m a bit surprised that Wired‘s Let Your PC Do the Investing presents automated trading as cutting edge:
As a stock-futures trader, George Pruitt used to spend the day hovering over his computer screen.Now, he just stays within earshot. When his computer identifies an attractive time to buy or sell, it emits a horn blast. It does this often, including once last week while Pruitt was on the phone discussing his approach to automated trading.
“You hear that going off in the background? That’s saying the price of the e-mini just went up to a certain level,” said Pruitt, director of research at Futures Truth, a trading company and magazine publisher in Henderson, North Carolina. The e-mini, a futures contract that tracks the S&P 500 Index, is one of several securities the company monitors almost exclusively online.
While successful trading strategies still usually involve some subjective human analysis, traders are entrusting a growing share of the work to their PCs. Most of the time, individual investors authorize each trade before it goes through. In some cases, however, even solo investors are cobbling together systems that are 100 percent automated.
Call it the age of the machine trader.