Yes, absolutely! There is room for both!

It certainly has been a volatile period but this is surely the result of more pronounced nervousness and the reigning in of protective measures to limit drawdowns. Notably balanced by the rapid reversal of daily divergences from the mean.

It is perhaps a sign that both market-makers and trading pools are aligned with this methodology for limiting exposure rather than humans assuming a negative attribute arising from increased algorithmic trading.

The article attached to this post also considers a possible secondary cause for disruption; that of ETFs. Perhaps one might argue that the contrary exists; that an increase in trading presents new opportunities for access to capital markets to the benefit of all.

My own algorithms are bred to handle volatility. If others find that their stock and ETF market algorithms are not dynamic and adaptive then perhaps it is time to consider a market rotation or the development of a new system.

Yes, absolutely!

All you have to do to make money is to take advantage of someone with a bad idea. Can a person or robot be taught to recognize oportunities like that? Certainly there are enough bad ideas to go around.

Already have

Fundamentally speaking, all successful forms of trading can be quantified with the right technology. That being said, having breakfast after the market open with a few people while a system trades for you is far better than the alternative.

Yes, for small traders, not a choice for larger buy or sell side firms.

Large outfits automate to cut costs on repetitive tasks, mostly compliance, order routing and matching, market making management, basket and block trades. Lots'a robots here. Smart stuff, very serious.

The cool stuff you want is the machine that makes you profits on its own. HFT and large hedge funds have to automate. I have worked on a few projects. Basically, the AI rules are simple, but there is a large stack of them. And some conditions trigger other decision stacks. A human cannot cope. Too much work you see.

As for small day traders, Yes I have clients that use AI to mine for gold in databases and in real time. I seen some nifty stuff based on option boxing, arbitrage and other inter-market trades they all require tons of calculations.

My two cents if you build something : use the worst of the bid ask fork on all legs. Use events and not time series to identify gold. Check your routing API.

The reason volatility has increased is because alot of leveraged money has come into the market due to the proliferation of cheap money from the Fed.Also,investors, who normally would be less allocated to stocks, have invested in the market to try to get some returns, because of yields being so low. So you have much more pronounced moves as many different players enter and exit the market. However, why should volatility be an issue? As a hedge fund manager , one should want volatility so there is significant movement in prices. Without this, one cannot make money! It only becomes an issue if your methodology is long only and you have concentrated positions or non-diversification. Volatility gives traders an opportunity to capitalize on large movement, provided one has a system to capture it. Frankly , many managers who have complained about volatility , have only been hurt because they have no risk management components in their strategy. Many fund managers got hurt in energy stocks and pharmaceutical stocks like Valeant, but they could have easily sold them when they started to drop. No one told Ackman to hold Valeant from $200 to $70! When markets are going up, it's easy to confuse brains with a bull market. It's in periods like this, and 2008 that one can see if a manager is truly adding alpha. I love volatility! I designed my methodology to deal with volatility and to profit from it. I suggest that other hedge fund managers should do the same!

well spoken, as a trader from the stone ages, volatility breaths opportunity, as well as uncertainty in the market. I have found that times like these tend to be more opportunistic than anything else, the game is so psychological for humans.People can't stand the pain.Emotions get in the way, as people tend to make irrational decisions. Versatility and being able to be nimble in this type of market is the key to success. Knowing when you are right and taking advantage of key plays should be locked in. Knowing when you are wrong by limiting the loses is hard for humans to accept.A truly great trader should know this. People hate to accept that fact that they are wrong, nobody likes that! Being humble helps.

Only under the circumstances that programs are made without error and over/under fitting is no longer an issue. Therefore, enjoy your alphas until that point.

Technically Yes, will the operation be profitable? that's a different question. One of the biggest issues which still remains is "the gut feeling of an experienced trader". Just look at robots, they have replaced humans for very specific repetitive tasks. Similarly, 100% algo or bot trading is successful in extremely well defined environments. I prefer the hybrid model of using algos/bots to identify opportunities and forward them to a trader who can then cherry pick the trades.

I think the big question is not if - but rather how.

A good customized robo,best internet,good strategy ,can replace human traders in future.

Humans will till have a chance until the algorithms( AIs) have the capacity (we allow them) to change the markets.

Think deeply about it.

If we change the headline to "can autopilot replace human-pilot in flying an airplane?", the answer is then obvious - i.e. machine is good for repetitive tasks, yet we can't replace human for non-trivial tasks. An algorithm is good, because behind the scene there is an excellent team who built it.

I respectfully submit NO, although the functional aspects of trading can be done with robots and an ever increasing number of quantitative parameters are being analyzed and handled by robots, the process of feeding the robot how to respond to all situational analysis remains a game dominated by the mind. Even though we rely on robot output of data, correlations etc., much like chess - developing an AI robot that can consistantly beat the Masters is the real challenge and that pursuit is still an exercise of the mind. I'll build a robot that can beat your robot is the game and the robot design game is not yet fully automated.

When everyone can develop his own robot (automated strategy ) at a level or even higher than an institutional team of programmers, that is the time when the market is taken over by automated trading for real.