Stock Trading Computers - Are They Advantageous?

[Shelby Ward]

Computers and technology have become integrated into almost everyone's
lives. Computers are used for everything from basic communications to
business, financial and investment transactions. Society is becoming
used to reliance on computer technology in many aspects of life.
Computer technology for the stock trading market has advanced
considerable over the last years and is becoming a trend among
investors. In fact, numerous institutional investors now opt to use
technology for assistance in making investment choices.
There are people who endorse computers as the better choice at
choosing stocks than the customary human brokers. This might be argued
by those who believe otherwise. Regardless, it is important to
remember that technology can only offer recommendations. In the end,
you are the one who has to make the decision.
Advantages of Computer Technology
Investors who chose to rely upon computer technology for picking
stocks argue that eliminating human brokers removes human emotions.
The broker may have subjective ideas about certain stocks and not
recommend them to the investor. A computer will provide only logical
objective guidance.
Computer programs are engineered to search data layers for stocks that
meet the investors goals. There is a huge amount of data available and
a human broker may not have the competency to be as thorough. Another
benefit is that any self-interest motives held by a human broker are
excluded. There is the possibility that picking investments through a
computer may perhaps give the investor an opportunity to earn more
money on their stocks.
Disadvantages of Computer Technology
Even though it appears computers are a valuable asset to brokers and
investors alike, there are drawbacks to every system. Computer
technology is developed by humans so, therefore, there will always be
some partialities in the technology. There is no technology available
that can cipher all the variances in the market.
As there are multitudes of these computer programs in use, a
difficulty often encountered is that the same stocks will be
recommended. For example, fifty computers running the same information
through their systems may endorse identical stock. If the fifty
investors take the computers' advice there will be a high demand for
that specific stock.
When there is high demand for stock, market prices are driven upwards
which is not a desirous condition for investors. In these
circumstances, computer technology will not have benefited the
investor.
The fundamental question that remains is whether computer technology
is beneficial. There are two answers to that question. Yes and no.
Computers have the ability to compute in-depth data while, at the
same, maintaining an objective approach. However, technology has not
yet reached a point where there are no imperfections. This may cause
the computer to offer recommendations that could possibly be
detrimental to the investor.
The stock market is a volatile and unpredictable scene. An investor
needs as much assistance as possible when considering when and where
to make investments. Whether you chose to utilize computer technology
or human advice, or both, you will still have to make a final decision
on your options.

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