[torero]

There has been many questions about the markets being automated little by little and leaving discretionary traders as a bunch of minority lose cannons (Soultrader brought up this topic a while back). I think it is going this way, but the fundamental problem remains is who owns the money that they're losing? Machines? Computers? or Humans? If they answer correctly, then it's down to human psychology driving the markets, not machines (I've never seen a machine screaming "Oh my GOD, I'm losing millions, I got to scale down, scale down!!!!!). Of course the end result is the investors lose the money but Wall St. keep ticking with their fees and comms. End game: no matter how you play, they win.

Maybe we'll go back to basics. This is due to the fact that quant has enjoyed a nice bull market. Heck, anyone can make money at this point, engineer or not. Once the cycle changes (i.e. volatility, bearish, consolidation, range-bounce, what have you), that's when the real test on which funds/traders can cut it. This was exactly happened up til the tech bubble.