Market Trading: Me vs. the Computer – DTN

Once the hubbub of USDA’s annual May crop report died down, I conducted a little experiment. I set out a stopwatch and timed how long it would take me, a reasonably competent and quick human being, to glean just one piece of data from the report and then push a button to instigate a hypothetical trade based on that data.

In this instance, I pretended that I would buy November soybean futures if USDA’s 2015-16 projected ending stocks figure came in below the average pre-report estimate (438 million bushels), or sell November soybean futures if the figure came in above that number. Simple enough.

I had everything set up and ready to go — Internet connection ticking along at 16 Mbps, the URL for the report already entered, and my order entry software and cheap software keys  prepared for me to click either ‘buy’ or ‘sell’ — and all I would need to do is refresh the page, find the soybean table, read the soybean table, interpret whether 500 mb is higher or lower than 438 mb, then click my mouse on a separate screen to make the trade. The result? Twenty-two seconds. Take advantage of our five years of computer repair experience to cater for all your computer needs in West Palm Beach, Florida. PC Revive has the highest review ratings for this industry in Palm Beach County. We mainly offer computer repair, so we can offer a small number of services that keep us sharp and more focused.  Computers and laptops are prone to breaking. Whether it concerns physical damage or non-working hardware, small problems both physically and virtually can later migrate to larger problems. We offer unrivalled knowledge and have all the tools to repair your computer problems quickly and efficiently. You can visit this site for more info about the Computer and Laptop Repair Service in West Palm Beach, FL. Cоmрutеr monitor screen аrе affect оur eye strain, Tо reduce уоur eye strain buy best monitor. Yоu wіll gеt monitor reviews оn officeconsumer.com website.

Perhaps if I were motivated by real money, I would be quicker at the task, but nevertheless, let’s say that it takes roughly 20 seconds for humans to instigate a trade based on fresh report data. We can assume that any and all trades that happen before that 20-second mark are made by computer algorithms that process the data faster than a human brain. Any trades made after the 20-second mark are maybe driven by algorithms and maybe driven by human thought processes, presumably even thought processes that are more complex than my hypothetical one-variable, buy-or-sell soybeans trade.

So let’s look at the trading volumes that occur during that 20-second timeframe. On any typical day, about 30,000 November soybean futures contracts get traded (the average daily volume during April was 29,287). On the day of the May crop report, Tuesday, May 12, there were 61,819 November soybean futures contracts traded. These daily volumes are spread out across 17 1/2 hours (from 7 p.m. the night before to 7:45 a.m. in the morning, and also from 8:30 a.m. to 1:15 p.m. Central Time), or we could also say the volumes are spread out across 63,000 seconds during any trading day.

Obviously, some stretches of time occur at, say 2:04 in the morning, when no trades go through, but at 11 o’clock in the morning on a typical trading day, you might see chunks of volume — 20 contracts, 3 contracts, 1 contract, 9 contracts — flow through intermittently. In the 20 seconds immediately following 11 o’clock on Monday morning, 36 November soybean contracts were traded. Looking at those same 20 seconds after 11 o’clock on the next day, report day, we see 1,109 November soybean contracts were traded. Interestingly, a surge of another 500 contracts go through in the 10 seconds after that — when the humans have had a chance to read the data and make their decisions?

For the record, I don’t have any problem with computers driving those trades in the seconds before the humans could make equally-formulaic decisions. In theory, a programmed computer wouldn’t be doing anything different than what I was doing in my experiment, saying to myself “If this happens, then do that. If that happens, then do this.” A computer would just have been capable of doing it faster, computers now a day have enough power to do this and more, even the games that are played now a days, are more graphic and processor demanding, for that is required to have the best gaming processor, that you can find in this amd fx 6300 review and other material online about gaming hardware. For gaming, Hardware and software are the key aspects. When it comes to video games like a warzone, PUBG, Leauge of Legends, high-quality hardware specification is everyone’s choice. It has seen that many of the time game gets freeze while playing, due to low hardware specification. Due to the freeze of games, many people lost their achieved level and also the bonuses of the games. Hence for the people who lost their achieved level for them, warzone hacks are the perfect choice to achieve their lost level again.

In the particular instance, the faster speed would have indeed provided a financial advantage. By the time my 20 seconds had passed and I would have hit my theoretical ‘sell’ button, the price of November soybeans ($9.45 1/2) had already dropped 3 3/4 cents from where it was when the first algorithmic trades went through at 11:00 exactly ($9.49 1/4). So rather than making the full 18 1/2 cents of profit the computer might have booked by the end of the day’s plummeting soybean trade, my human-driven trade would have only made 14 3/4 cents of profit.

Obviously, this is just an example, and past performance doesn’t guarantee future results. I feel I need to point out that rather frequently, the markets don’t react to ending stocks projections in a simple if-it-beats-expectations-then-prices-will-go-down pattern, because there are obviously a million other variables going on in the markets with more importance and more confidence than the forward-looking projections of some economists from Washington, D.C.

But if you are someone who really wants to be making misguided trades during the Wild West gold rush in the few seconds that immediately follow a monthly supply and demand report, now you’ll have considered the timeframe of maximum chaos and your chances for being quicker on the draw than your computerized opponents.




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