Algorthmic Trading- Absolutely Fascinating

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Finance encompasses an extremely wide area of different expertises. The recent area that I have found fascinating is algorthmic trading. The idea is brilliant, and its performance in terms of returns speaks for itself. In fact, the returns are so amazing that normal investors aren’t allowed to invest in algorthmic trading firms. The field is relatively new as well, with growth in program trading at the NYSE growing 30% in the last 5 years. There are various methods to algorithmic trading, from short timelines in the milliseconds to weeks or even months. In the finance section of Comm101 we had a chance to speak to two PMF students- Rae and Jennifer. Their quick introduction to Capital IQ and Bloomberg sparked me to check out the terminals at the Wayne Deans Investment Centre. I was truly astonished by the amount of data the Bloomberg terminals were able to reveal, with many mathematical models working in junction with news correlation being used. How is it possible that normal traders are able to compete with computers that are able to analyze much more information and much more quickly? I think the future of finance and trading lies in technology and algorithmic trading. Quick research has even show that algorithms can have correlation rates of 98% when making trade decisions. These numbers are almost unheard of in finance, and because of this I feel there is still an untouched market in algorithmic trading.