How algorithms will change the role of the trader over the next decade.
While the UK Government's Foresight panel, which was assembled
to study the implications of high frequency trading (HFT) on
the economy, said the number of human traders employed in the
financial markets is set to fall dramatically over the next ten
years, I wouldn't write off all front office traders just yet.
Even the best algorithmic trading set-ups need people with
front office P&L responsibility to actually have a view on
the market, to set the parameters and oversee their algos
activity. It is important that someone owns the responsibility
of ensuring the right practices are being followed. Granted, we
can expect inventory and market responsibility for individual
P&L owners to broaden given machines' ability to cope with
more, and, as a result, there may be less traders on a given
sector- or market-focused desk. However, the future will
certainly not be empty trading floors.
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