Computers For Stock Trading – Are The Markets Rigged?

By Author: thomasgalvin
Total Articles: 612
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Every time the stock market goes down, I hear the talking heads on TV come on start the blame game on Wall Street. For some reason, it’s always Wall Street’s fault that the market collapsed. The latest blame goes to Computers for Stock Trading. Many so called analysts are blaming traders for the market volatility. They say the high frequency traders, algorithmic traders and quant funds are manipulating the markets. These traders are even blamed for the flash crash that happened last year.

Perhaps the real reason for the volatility and overall poor action of the stock market is the fact we are still in the Great Recession and the traditional stock investor no longer exists! Free cash has been spent paying bills. How about the fact so many people don’t have jobs or money to invest in stocks. When you have less market participants, you have a thinner market. That is a fact. How come these TV guys never see that the stock market is a mirror of the insane psychology of the economy in the US. There is no certainty with taxes or regulations, so nobody knows what to do. The stock market is just mirroring the ...
... sentiment of its participants (or lack thereof). I am tired of people blaming computers for stock trading for the market insanity.

It is funny how people always blame something they do not understand when the markets tank. I have yet to see a description of high frequency trading, quant trading or algorithmic trading hurt the average market participant. Experts can’t explain how it works. All they do is point fingers.

If you are a market participant there is one a blaring truth in all of this. Very high powered computers for stock trading are required if you are going to compete in these markets. If you are trying to trade on old outdated computer you are going to be at a disadvantage as your decision making engine, that is your computer will be showing you stale information. Even the computers from just a few years ago, especially the lower end ones, can’t keep up with today’s incredible levels of data flow.

In conclusion, the markets are not rigged as the news may say. But having new computers for stock trading is an absolute must. Not having good technology would be like competing in a auto race with an old car.

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