Will the bot for trading on the stock exchange replace the person?
According to the analysis of the Bank of Russia, from 30% to 50% of transactions on the Moscow Exchange are supervised by trading algorithms. According to experts, the impact of robots on trading will only grow. Beginners do not often come to algorithmic trading. Usually this area is interested in users who are already engaged in the activities of exchanges and tired of the usual trading. And the more people are introduced into this industry, the more they understand that there is no complete understanding of “algorithmic trading”. It is a collection of fragments of various strategies. Today, there are several categories of robot trading enthusiasts. So, in addition to individual users, prop-trading companies can be found. Their main difference from other organizations is that these corporations trade on their own money. That is, the received proceeds also go to the accounts of the company, instead of in the pocket of customers. It should be noted that although trading robots and is a promising industry of Russian exchanges, recently it has become harder. For several years, the possibility of earning from algorithmic strategies only fell due to the imposed sanctions and high-profile political cataclysms.
Will the bot for trading on the stock exchange be everywhere soon?
However, on the other hand, thanks to them to start trading the Russian investor does not need large amounts of deposits. That is why algotraders first start their activities in their homeland, and after they enter the international market. In addition, the immediate development of the industry can become a challenge for a beginner. Experts note that to stay afloat trader has to constantly invent new strategies and follow innovations.
The Bank of Russia recognized the usefulness of algorithmic trading for the market. According to its representatives, this activity forms additional liquidity. This, in turn, means an increase in profits even for those who do not use robots on exchanges. However, it is worth noting that this strategy does not always increase profits. In moments of sharp movements of the course, it on the contrary can increase losses.
An example of this may be the case when there was a lightning collapse of 20% on the American market because of the robot. In addition, algotraders can be the cause of multiple falls. For example, the US exchange Dow Jones in 2018 went minus two times: On February 5 and 8 by 4%. The only ones who remain in the plus, in such a situation, are high-frequency traders. Do not be afraid that at one moment only robots will remain on the market, because this will not happen. Everything is interconnected on exchanges: if the increase in liquidity leads to an increase in the number of algorithmic operations, they are followed by a decrease in their profitability. Besides, algotraders as anybody are familiar with the fear to be out of the market because of professional unfitness. Now the competition is getting tougher, thereby reducing volatility of financial market algorithmic traders are looking for new ways to develop themselves, for example, cryptocurrencies.