• underisk@lemmy.ml
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    8 hours ago

    Much of the trading on Wall Street isn’t done by humans, and what remains of human trades are increasingly influenced by automatic tools. These tools and algorithms aren’t aware of context; they base their trades on moment to moment vibes, basically. They tap various news sources, social media posts, etc for signals that indicate a market direction.

    • eronth@lemmy.world
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      8 hours ago

      Also, a lot of trades are based on what you’re expecting other people to do. If everyone trades that way then nobody is trading based on reality.

      • underisk@lemmy.ml
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        5 hours ago

        Yeah, the algorithms also form a similar feedback loop with their trades. Then you have people and competing algorithms predicting what those algorithms will do and trading based off that and the result is an entirely vibes based economy.