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April 30, 2020

Why is automated trading only starting now?

The image of the hundreds of traders wanting to overshadow each other on an ordinary trading day on Wall Street may be somewhat outdated. Still hundreds, even thousands, of traders are actively trading every day, but things are very different these days. Today, we'll explain why this change has taken so long.

BOTS by RevenYOU | Automatic trading
BOTS by RevenYOU | Automatic trading

There has been a major shift, the shift from physical trading to digital trading. For several decades now, an overwhelming majority of positions have been taken via digital systems. However, this is still often done manually, it is only recently that we have seen that this is becoming increasingly automated.

The question is, why did this have to take so long? If the first computer was already developed in 1938 by the German physicist Konrad Zuse, why did it have to take so long for these computers to take over the sometimes labour-intensive work for us?

Moore's law

If we go back in time, the time when not everything went via the digital way of course, you'll see that everything went incredibly fast. Where at first computers were seen as something exclusive and extraterrestrial, it is now the most normal thing in the world. This growth and habituation can be explained by Moore's law. One of the founders of chip manufacturer Intel, Gordon Moore, made a prediction about the future of technology in 1965. He predicted that the transistors in a chip, and therefore the speed of this chip, would double every two years. This would keep the size of a chip the same and increase its speed at the same cost. This process is also called scaling , scaling up the product.

He did the prediction after looking at the first few chips from his company Intel. The first chip had four components, a year later it was already eight. When about four years later there were sixty components on a chip of the same size, Moore dared to share his prediction with the world. The law has played itself out well for more than 50 years. Where gigantic computers used to have limited computing power, we now have powerful computers in our pockets in the shape of smartphones. A chip used in an iPhone 6 contains exactly 2 billion transistors, on the same surface that had only 2 transistors decades earlier.

In recent years, however, it has become clear that Moore's law can no longer stand as the scaling process has become more and more complicated over the years. Currently a certain limit has been reached which makes it very complicated to get rid of even more transistors on the same surface. However, this development over the past 50 years has ensured that the current computing systems are very powerful and capable of a great deal. However, the question is, how does this relate to automated commerce?

How does this relate to trading bots?

The graph of Moore's law shows very clearly that things went very fast with the technical revolution. However, it also shows that this revolution has taken years. The first computers simply had very little computing power and were unable to perform complex tasks. Performing a simple calculation was previously seen as a complicated job for a computer.

Dealing with robots is done on the basis of many different factors. A trading robot is an algorithm that is linked to the data of a trading exchange that requests the current data per second. Every second, requests go back and forth to the exchange and to the platform of the trading robot. It depends on the predetermined indicators on the basis of which the robot trades, but in general these actions require a lot of computing power. This simply wasn't possible twenty years ago, when computers were already being used fanatically.

Today, that's a completely different story. More than ninety percent of all trading positions are taken automatically on the basis of thousands of factors that are adjusted every second. These computers are often installed in large data centers for large trading offices. The offices are able to weigh their choices on the basis of a huge amount of data, with precision every second. That data is complex and complicated, but with the help of smart innovations, you too can now trade with a robot.

You can also trade automatically

The phone in your pocket is capable of carrying out complex assignments and therefore also of acting automatically. With the help of a mobile application, you can set up a robot to trade for you within minutes. This is currently done by various parties and often also by individual makers who develop the robots themselves. However, the overview of finding the right robot is often very complicated. Who really has your best interests at heart and what is a profitable robot that fits your investor profile? These are questions that arise when you start the search for a suitable trading robot.

BOTS by RevenYOU has developed a mobile application in which you can set up your own trading robot within minutes. Different developers can offer their robot on the platform and everyone can use it. Normally a license of one of these robots is very expensive, but with BOTS you only pay about the trades made and only a very small and fair amount of money. Until now the robot only trades with cryptocurrencies, but in the future it is the intention that the shares of the larger companies will also be offered for trading. The return seems to be strongly correlated with the current state of the cryptocurrency market. Recently there have been several robots that have shown special returns, but these have also been substantially corrected after the fall of, among others, bitcoin. The future looks bright, when trading robots can do more than just take lung positions.

Investing is for everyone

Everyone should be able to invest. And now they can. With BOTS. Together we are going to make the world of investment fairer and more transparent. Are you interested, but your question hasn't been answered yet? Take a look at the FAQs on our site. Or contact us, we will be happy to explain it to you in person.

The BOTS app is now live

Important update: We are now out of the beta testing phase, download the BOTS app on your mobile phone today! For Android click here, for Apple click here.

There is no such thing as risk-free trading. It is possible to lose (part of) your stake.