In a blog at dummyspots.com a trader compared the swarm intelligence of e.g. ants to the behaviour of a swarm of traders.
Well, are traders “swarming” ?
Swarming, no, and intelligence ? Certainly not. Is the fact that stock prices move, in seemingly no logical direction, but in reaction to lots of peoples behaviour any sign of intelligence. I suppose no ! What is the benefit for the swarm ? There is benefit for some traders but there is an equal amount of loss for the others. Consequently the sum of the benefits is zero, nada, nil, noppes, nul de botten, rien du tout. With such intelligence no ant swarm would survive till the next day !
Moreover, traders are not swarming. They just act independently with no mutual interaction whatsoever. Well there is a sort of interaction, as they respond to the result of their trading behaviour on the stock price. And there is even another sort of interaction, namely the blog and spam messages about stocks that are going to boom and which you should certainly buy (not saying they bought them already and if you follow their advice they will be the first to sell and leave you with the losses). But that is not the behaviour of a swarm, but of a unconnected collection of selfish individual hunters who know there is a lot of competition.
Recent Comments