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Posted: Thu 15:37, 14 Nov 2013 Post subject: everything is in balance |
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Robots working faster than humans can comprehend take over markets
CORAL GABLES, Fla., Sept. 11 () -- Robots trading on global markets and operating at speeds beyond human capability can overwhelm the system and bring trading to a halt, U.S. researchers say.University of Miami scientists say the "ultra-fast machine ecology," working at time scales of less than 1 second, can push financial markets from well-ordered systems to a chaotic universe dominated by packs of aggressive computer trading algorithms outpacing humans' ability to control them.A drive for faster systems that can outdo competitors has led to the development of algorithms capable of buying and selling faster than humans are capable keeping of with, they said."These algorithms can operate so fast that humans are unable to participate in real time, and instead, an ultra-fast ecology of robots rises up to take control," study contributor and physics Professor Neil Johnson said."Our findings show that, in this new world of ultra-fast robot algorithms, the behavior of the market undergoes a fundamental and abrupt transition to another world where conventional market theories no longer apply,[url=http://www.christianalouboutin.co.uk]christian louboutin Outlet[/url]," he said, often leading to system crashes or unexpected trading spikes.Johnson compares the situation to an ecological environment."As long as you have the normal combination of prey and predators, everything is in balance, but if you introduce predators that are too fast, they create extreme events," Johnson said. "What we see with the new ultra-fast computer algorithms is predatory trading. In this case, the predator acts before the prey even knows it's there."
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