If that got you upset, this idea will make your head explode:
If you figure out what a competitor's algorithm is programmed to do, and you can buy/sell to setup conditions where you know it will respond a certain way, what's to keep you from repeatedly manipulating the market to take advantage of their algorithm?
Keep in mind that if you "short" a stock, you can make money with it going down...
It's a big boys game, for sure- there are people lined up to take advantage of you if you're not understanding all the rules.
Quote:
Originally Posted by j427x
i am thinking it would not take much to set off a panic or a bull-rush.
whoever gave this news story to PBS left out that such computer trading systems could manipulate stock prices either up or down and a malfunction or software problem might cause a panic.
i suspect right now the program traders are pushing the market UP--but what is going to happen WHEN they decide to take the cash and run?
everybody else is going to get holding the bag.
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Look up "Black swan event"... It happened On May 6, 2010 - and will happen again- the markets have controls in place (now) that will halt trading after a runaway starts to limit the damage.