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22 Oct, 2008 01:41

Trading places: Man Vs. Machine in battle for profit

While for most investors topsy-turvy markets are a headache, some see them as a lucrative and money-spinning opportunity. Now, with the struggle to stay afloat growing, the question is who is more likely to make a profit.

Recently the number one trader at Russia's RTS stock exchange was a 22 year old student. From a small town, Svetlana was introduced to the world of trading a year ago by her husband. First a hobby, now it has become her way to make her living.

“I'm studying to become an accountant. The current crisis hasn’t really affected my position at the stock market. I never used any automatic computer programs and now I think the market is too volatile to start using them,” she said.

Even so, the number of computer trading programs being used is increasing rapidly, although there's no evidence they are more successful at trading.

One of them is called Robot SPB – a program created by a researcher in econo-physics Gregory Fishman. It took his team three years to develop the program and Fishman believes that computer trading programs are the future.

“The market is changing all the time and we need to follow these changes,” he said. “We monitor the trading robot that we developed and we update it following market needs. It works automatically and has brought quite a good profit so far.”

However, some people question the robot's effectiveness. Evgeny Dankevich, who works at one of Russia’s financial corporations, says the robots are only able to deal with small amounts of capital. 

“The most difficult thing in writing a program for the robot is to work out an algorithm,” he says. “Not all programs are successful. There are a range of different strategies that professional traders choose to work on the market. And sometimes a person that does it just for fun can be more successful then a professional in this area.”

Experts say each financial corporation relies on two or a maximum of three successful traders. As the number of trading companies in Russia is growing, competition between artificial intelligence and old fashioned brain power is bound to continue.

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