The thing about playing chess, why can machines win humans in playing chess, it is because chess has very strict rules.

The entire game has got very strict rules.

So that’s the reason why the computer or the machine can calculate the different possibility of the steps to conclude.

However, the thing is in the market, the number of variables okay it’s almost infinite I will say okay, there’s hundreds and millions or thousands of reasons that some people could buy some people could sell some people could buy a million shares, some people could sell 1,000 shares.

So there’s too much variable for a machine to be able to conclude what’s going to happen after that okay.

Even for the best algorithmic trader, I studied some of the hedge funds who use machine learning and algorithmic trading right, what happens is that even they come up with a profitable strategy that strategy tends to lose its edge over time okay.

So what happens is that they have to keep thinking about what other ways, what other strategies that they can use.

So it’s the same for even visual discretionary trader like us as well because we need to be able to see okay current market condition is it trending higher, is it trending lower, is it going sideways, is it consolidation because once you analyze what is the condition right now then you are able to pick the strategies for that particular situation okay.

So the thing is when is the situation going to come?

You never know but when it comes, a human mind you’ll be able to detect it faster then if you are using a machine.

So that is my opinion for this at this point and the advantage of machine generally is that speed is speed okay, so that’s the reason why I would suggest that machines pose a very strong disadvantage to traders if the traders are trading very short term because machine will always do it faster compared to a normal trader.

So if you move slightly longer term, let’s say for example to short term swing trading where your holding horizons is a few days to a few weeks or if you are a longer-term swing trader to a few weeks to a few months that kind, machines will not pose a problem to you as a trader.

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Philip Teo

Founder & CEO at Traderwave Pte Ltd
Philip Teo is an entrepreneur, speaker and trading coach who specialises in the field of Technical Analysis of the financial markets. He is currently the Founder and CEO of Traderwave Pte Ltd, a financial technology company that offers a web charting application to global traders. He has conducted many trading seminars and appeared on national television before. He is also currently an official speaker and trainer with SGX Academy. Learn more about him at his Google+ Profile, LinkedIn Profile and Facebook Profile

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