Systems of the future

2 December 2013


Have you seen the video of the BMW driving down Germany’s Autobahn with no one at the controls?  You might not think that a “hands free” driving experience is one you’d ever like to have yourself but it’s quite extraordinary to watch. As long as the route is programmed into the car, it can manoeuvre itself through the traffic.


The reality is that machines are getting smarter all the time and there are huge benefits for all of us. A car that drives itself? Yes, it sounds dangerous, but think of the advantages. It couldn’t get distracted by a mobile phone, fall asleep at the wheel, argue with a passenger or even blow its nose. And it certainly wouldn’t be able to drink-drive. Self-driving cars could potentially be safer than human drivers.

Milton Keynes in Buckinghamshire is about to become the first place in the UK to pilot driverless cars. These trials are happening all over the world and this one will be modest by other standards, using a hundred self-driving pods on special lanes. If you’re looking for speed, they’re not the answer – the limit is restricted to 12mph. The research so far suggests that driverless cars reduce accidents because they eliminate human error and give us more time to during our commute to do other things. They are, we’re told, the future.

In the same way, there are systems which can now undertake large parts of the trade by themselves. They too are the future – in this case of trading. Algorithms for automated trading are written by human traders, and trading takes place under the oversight of experienced people: like changing car tyres, some things will always need human intervention. However, like automatic breaks or vibrating steering wheels on a car, safeguards are written into the algo, so that trading will cease automatically if any warning signals are received.

The technology for automating these systems is getting better all the time, and more and more traders are using them. Soon trading without algorithms will look as out of date as a Nokia 3210 or a car which requires you to actually steer it yourself.

The views expressed in this blog post are the personal opinions of the author and do not necessarily reflect the official policies or positions of the FIA European Principal Traders Association or the Futures Industry Association.

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