Will traders be out of a job in the future?
Hi guys, I've been a long time reader as a guest and this is my first time posting. I know this article is a bit outdated, but I found it very interesting. Have a look.
From this article from Forbes.
Quant funds like those managed by Two Sigma and Renaissance Technologies have been consistently posting solid returns in recent years while most other hedge fund strategies centered around the trading decisions of human beings have struggled mightily.
Judging from this article, if this keeps up, then I think all the finance majors and MBAs will turn to degrees in computer science or mathematics. Is this change inevitable? Will quants be the big stars of Wall Street? Will human traders go extinct? What do you guys think?
There will always be a need for a human aspect in finance. But, we are starting to see a transition where some jobs we do now, can be done more efficiently with a computer. Maybe not as many jobs in finance, but it will never become obsolete
Do you think the reason the transition to making trading decisions based on data is due to the fact that emotions have a major impact on the decision of human traders?
Could be. When a fund manager can't beat the s&p 500 index, whether it be due to emotional investing or bad due diligence, why wouldn't someone go to a trader that's actually a computer to achieve a result that could beat the market.
For all traders out there, have your emotions ever changed your decision even though trends and such pointed to a positive outcome? In other words, did you ever think that something was "too good to be true?"
Of course MOST traders will lose their jobs to AIs. Are you kidding me? For vanilla products for sure. Maybe it will take a few years for exotic derivatives.
Emotional people is not the main concern here. If traders be replaced with computers it will happen only bacause people are more expensive. Physical Ag traders will not be replaced soon...
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