The Trader Mind VS Technology in Times of Uncertainty

The iFX EXPO Asia 2022, which took place in September in Bangkok, aimed to connect top-level executives from the most prominent international firms, and give them a platform to network, grow their business, and engage in insightful content.

Our very own Dor Eligula, co-founder and CBO, was invited to offer his take at the panel: The Trader Mind VS Technology in Times of Uncertainty.

The trader's mind is often associated with emotions of greed, fear, or panic in times of uncertainty. It isn't always connected to the rational side of making a decision. How does it affect financial trading?

The panel members shared their insights on the way the market acted during the 2010 flash crash as an example of an uncertain period of time. While most of the panel suggested that the market reacted with rationalism, Dor elevated his impression that emotion had a great part in the market's behavior, as financial institutions operated out of emotional fear. There is no shortage of empirical evidence indicating that individuals make poor trading decisions, especially in times of volatility. The ability of humans to make good decisions under these conditions is dubious at best. Given this fact, it seems almost imprudent for financial institutions, trading platforms, and portfolio managers to not rely on some form of automated decision support. The challenge, of course, lies in selecting the right automated analysis tool.

The panel discussed the downsides of this technology. Good traders would look for perfection in the tools they utilize and would want an automated AI model that is totally immune to the irrationality of their fellow traders. With that being said, it's important to acknowledge that automated trading tools have imperfections. According to what Dor claimed, traders must understand these imperfections, flaws, and weaknesses before they use these tools. Understanding all of their aspects would help them adapt to the model, even if it doesn't operate perfectly.

In line with the above, Deshe Analytics' AI-powered research offers unbiased fundamental analysis and boasts a dedicated team that helps clients and partners achieve any need that arises. 

Interested to hear what else the panel had to say about trader minds in opposition to technology?

We invite you to watch and share here