How will it be If we can use a robot, also known as Bot, to make investment decisions and trade stocks on our behalf. The mental and emotional state of a robot has either positive or negative consequences. This trend should not be missed by investors.
The robot is to open the world of imagination and scientific knowledge into the future of humanity. This matter is getting closer to us. Because this year's technology trends are robots that can automate tasks based on commands entered into computers, and A.I. (Artificial Intelligence) that will make them smart, think and analyze logically just like the human brain.
How about investing? Will robots do better than people?
The idea of implementing an automated trading system or Robot Trading as an investment. Caused by the weakness that "Human mind" results in analysis and decision making to be prejudiced, susceptible to emotion over decision making. In addition, humans are a species that are lazy. Do not like the work that takes time and do the same over and over. Importantly, humans are not responsible for the investment alone. Focus or concentration is often easily taken away. Always make mistakes
Therefore, the idea of bringing robots or computers to invest instead of humans by creating an automated trading system.
There are various names such as Algorithmic Trading, Program Trading, Automated Trading, Bot Trading, and Robot Trading, all of which have a similar meaning, that is, using a computer program to send orders for stock trading by itself immediately when the stock price or market conditions match those of human-written models.
It's interesting, isn't it? How does a Robot work better than a human? Let's see
First of all: Robot is emotionless. which makes it unique in terms of "Consistency of decision-making" as there is no feeling. Therefore, they can withstand the pressures of various conditions without affecting their thinking and decision making. Unlike humans, if your mind is not stable, your ability to trade stocks will decrease. Most investors who are trade-sensitive tend to embrace losing stocks in the hopes of future gains. I hurry to sell enough profits will not be kept, unlike robots that trade according to the specified program only.
Secondly: Robot is not lazy, working on orders with discipline. Robot works according to investment strategies and conditions that have been set. Ready to work automatically and without hesitation, even in volatile markets. Robots will never be absurd. Because it has already been entered to perform the function. When they profit, they will not indulge. Time to cut loss will not have any regrets.
Number three: we can trace back. In most cases, the program uses historical data to prove a variety of investment ideas or strategies. And applied to design the system to be able to work automatically Backtesting can help you visualize what the return and risk are. If we use a strategy like this How much is the probability of getting a profit?
Number four: It is more effective. The robot will make decisions and send trading orders into the automated system. Therefore work quickly and efficiently Humans do not need to sit and watch the screen to waste time. Or need to send orders by hand Because sometimes they send the wrong order, many people will order the sale, but press to buy. Well, we take the time to do other things, such as finding new investment strategies.
Number five: it increases the trading speed better. Robots are definitely faster. Because it was pre-ordered When there is a buy or sell signal, it will follow the order immediately. Unlike humans who have to process decisions in the brain first. Nowadays, high-speed trading technology has evolved so fast that the order can be sent multiple times in the blink of an eye. And it allows us to trade stocks or other assets more often, trade across the stock market or even trade 24 hours a day.
Lastly: diversify your risks well and choose from multiple investment strategies.
Using a stock trading robot allows us to trade multiple accounts and different strategies. To diversify the risk The computer system can be scanned for investment opportunities across markets around the world. Ready to send orders and observe to us
It seems like Robot Trading is capable of helping us to invest better. But that's it Coins always have two sides, although robots have many advantages. But it also has weaknesses. Let's see what...
Using a man or a bot to invest, which is better?
First of all: the computer system may fail. Need to be monitored at all times Even though trading with robots gives us more time to do other things. There is no need to watch the screen all day, but actually the automatic operation requires periodic monitoring and monitoring as system failures may occur, such as a connection failure. The server has a problem As a result, the error order was dropped or duplicated.
Second: The Robot works on the exact command too. With too much honesty of the robot Sometimes the price may not be based on any theory or there may be a significant event that affects the stock price. Which is beyond the evaluation of the robot As a result, the Black Monday incident occurred in 1987 when the Robot collapsed and sold shares from the market. Because the selling force has not been calculated The slightest mistake resulted in investors and funds flocking to sell their shares together. This forced the Dow to drop 22% and it took 14 months for the market to recover.
Number three: security and potential information leakage. In the event that someone knows the pattern The program's buying and selling price range may also buy or sell stocks to trap. Until causing damage to investors who can use the system Therefore, there must be a system development based on safety standards. There is hacking prevention. And the leakage of information as well.
Currently, there are two types of investment in a robot. If you are knowledgeable about statistics, numbers And programming You can be an Algorithm creator or enter an investment program. But if you are an investor with no programming knowledge at all The easiest We choose the strategy. That has been created and developed
Best Off at Best
The main principle when investing with a robot is that you have to understand the principles of investing. Fully understand that robot investment program or strategy It must be the investment style that you like and are good at. And most importantly, you have to trust it. Let the system show its talent to show the results. You must not intervene while the program is running. Because that will destroy all the processes that have already been created. May result in you more loss than before
Today's robot trading system is still a Quant system or mathematical calculation. Which in the future Developers began to use A.I. to enhance the intelligence of the system. Making it possible to think and analyze investments for their own reasons and results Bring data in a qualitative way (Qualitative) to learn and memorize the past as a lesson deeply. This will allow it to adapt to trading like a human being. And still have the ability to trade according to the exact program It is interesting and we have to keep track of how the robot system will develop to be smart and able to invest for us to make a profit.
In this age where everything is driven by technology. Automation will play a greater role in our lives. Not exempting even investment. We must adapt to the changing situation. And make it worthwhile.