Automated Trading Systems

Paper Summary:

The paper explains the concept of securities trading that can work with a combination of high-speed computer processing with complex mathematical algorithms. The paper outlines the evolution of automation and discusses the benefits and risks associated with automated trading processes. The paper considers the implications for the future and concludes that ultimately, these systems have the potential to further revolutionize the financial investment industries far beyond their present-day capabilities.

Outline:
The Mathematical Basis of Securities Trading
The Evolution of Automation
Benefits Associated with Automated Trading Processes
Risks Associated with Automated Trading Processes
Implications for the Future

From the Paper:

"In principle, the concept of securities trading is readily reducible to mathematical relationships capable of predicting future stock performance on the basis of previous trends in the market (Skypala, 2006). However, myriad factors that do not immediately appear relevant to the stock market also have great potential to influence the market. This has always been true, (as illustrated very simply by the relationship between wars or other serious global occurrences during peacetime throughout the 20th century), but since the computer age and the 24-hour news cycle, events external to the market play a much larger role than before (Duhigg, 2006)."

Sample of Sources Used:

• Curran, R. (2008). Watch Out for Sharks in Dark Pools: Anonymity on Alternative Electronic Stock Exchanges Can Provide Cover to 'Gamers' Hunting for Big Prey
• Dey, I. (2006) Black Box Traders Are On the March.
• Duhigg, C. (2006) Artificial Intelligence Applied Heavily to Picking Stocks
• The Economist (2007) Dodgy tickers: Accurate information can make--or break-- exchanges.
• Skypala, P. (2006) Enter algorithmic trading systems race or lose returns, report warns

More papers on Automated Trading Systems:

• Term Paper # 150034 : "Automated Library Systems and School Library Media Specialists"
• Research Paper # 1429 : "International Stock Markets and Electronic Trading Systems"
• Research Paper # 108962 : "Self-Checkout Systems"

APA Citation:

MLA Citation: