Bots Can’t Trade Alone: Why Technology Hasn’t Killed Off Human Investors

Bots Can’t Trade Alone: Why Technology Hasn’t Killed Off Human Investors


Technology has changed the world. That’s not an original statement nor an outrageous one. The internet, smartphones, artificial intelligence (AI) et al have all transformed our lives. In the financial sector especially, technology has made things safer, more efficient and accessible. Indeed, one area, in particular, that’s benefited from technological innovations is trading. Today, online trading sites have opened up new opportunities for professionals and novices alike.

Diving into specifics, AI-based systems are improving a myriad of processes. From machine learning systems that can analyse massive amounts of data to automated trading robots, we almost don’t need to get involved anymore. In fact, at many of the leading trading sites, users can input an initial set of trading parameters, click a button and let the software do all the work. Put simply, technology has not only refined but revolutionised trading.

You Have to Fill the Pages of a Diary

But, and this is the important part, we haven’t been completely cut out of the equation. Ask any serious trader for a top tip and many will say “records”. Keeping track of your results, the moves you made and what prompted you to invest is vital. Without knowing how you’ve performed, you can’t improve. It’s the same with athletes. Without recording their results, they’ll never know which areas they’re weak in. Trading is no different, which is why the experts keep diaries.

A great example of why keeping a trading diary matters can be seen in the weekend trading markets. In general, financial markets close on a Friday. Even though the world doesn’t sleep, they don’t reopen again until Monday. These days are used as bookends where traders will track and analyse their results. However, what if there’s breaking news on a Saturday? Under normal conditions, you won’t be able to act on it. However, if you have access to weekend market trading through a platform like IG, you can act.

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Weekend trading platforms quote prices separately from weekday prices. This means you can react to breaking news or simply play the markets without interruptions. The initial benefit of this is that you can make money when the rest of the trading world is sleeping. The second is that you can hedge weekday positions. In other words, you could cancel out losses incurred during the week or insure yourself against any future losses. But, to hedge effectively, you need personal insights. Only by knowing your open positions, closed positions, results and future positions, can you develop a solid weekend hedging strategy.

Personal Insights Drive Trades, Not Robots

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Of course, you can do all of this during the week as well. In fact, a trading journal can be useful any time. However, it’s particularly important if you want to trade over the weekend because that’s an ideal time to hedge and, to hedge, you need to know your position. Robots can’t really help in this regard.

Yes, you can use programs to collect and store data. However, a trading diary should contain more than stats and facts. Obviously, you will need to input the specifics of each trade your make. From the time you opened a position, what you invested in, the cost, how long it was open for and, eventually, any profit or loss. However, you also need to enter personal insights.

  • How were you feeling when you made the trade?
  • What information inspired you to make that trade?
  • How did you feel during and after?
  • Was there anything you missed that you can now see in hindsight?

All of these insights will help you improve. From there, you can use your diary to outline your goals. All of this can’t be done by a computer. So, while trading has become a battle of bots in recent years, there’s still a place for humans. In fact, as much as we can use technology to our advantage, we remain the driving force when it comes to trading.

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