Courtesy of Matthew Samelson, Woodbine Associates

The trading environment certainly is more complex than ever before. But the experienced trader – not greater reliance on technology – may be the answer to mastering the markets. Big data, advanced algorithms, and even the threat of high-frequency trading may be distractions that don’t really matter.

Talk of automation, algorithms and data in equity trading has reached an all-time high. The sell-side – brokers and technologists – have a tremendous vested interest in complex offerings. Is it overkill? Trading desks at many institutions and hedge funds, as well as service providers, may be squandering valuable resources focusing on issues that don’t really matter.

At base we underestimate the real value of the experienced trader, over-rely on automation, and focus too much on distracting issues that just don’t matter. Maybe we need to go back to basics.

Best Execution and Trading Fundamentals 

The premise of Best Execution has never changed. The fundamental concepts – minimizing slippage or realizing a benchmark while controlling market impact – remain the same, in every market. In the post Regulation NMS era, sourcing liquidity in a fragmented market has introduced new complications. However, this has not compromised the basic tenants.  For the entire article from Tabb, please click here.