Fortune: Equametrics Offers Automated Trading Platform to Main Street

Wednesday, 19 Jun 2013 08:13 AM

By Michael Kling

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Automated trading is blamed for increasing stock market volatility and even creating "flash crashes," sudden and severe drops in stock values lasting just seconds.

Stocks of particular companies sometimes plummet drastically for seconds because of automated trading. Knight Capital, a large automated trading firm, lost $400 million in a day and almost went out of business because of a bug in its automated trading system.

And now the startup firm Equametrics wants to provide automated trading — now used only by Wall Street traders — to the public, according to Fortune.

Editor's Note:
 
Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

Equametrics Co-Founder Chris Ivey, a 26-year-old Harvard graduate, says his product will not offer high-frequency trading, which entails trading hundreds of times a second. EquaMetrics will allow trading no faster than once a minute.

He also maintains he'll market the software to sophisticated traders and institutional investors, who understand trading but want to avoid paying a quantitative programmer, rather than targeting ordinary folks. Currency traders will probably be the first top prospects, Fortune reported.

In a demonstration, Ivey set up a trade for Google stock, using the Golden Cross technical trading pattern. That pattern appeared just three times in the last two years. If you had traded 1,000 shares, the strategy would have earned you $73,000.

Because the application will run remotely on "the cloud," it only takes an ordinary personal computer to run it, according to Fortune.

And price won't be much of an obstacle for potential users either.

Costs range from $99 to $250 a month depending on how many algorithms you use. It's also straightforward to use. Customers can use drag-and-drop tools to create algorithms, although they have to devise their own strategies.

The company may have competition on Main Street.

Robotic Trading Systems says its CoolTrade software provides automated trading to both novices and experienced investors.

"CoolTrade software is easy to use," boasted Rick Moore, the company's president, in a press release. "Just download the software, turn it on, pick a strategy and walk away. It automatically picks the stocks, enters the trade at the right time and exits with a profit – without any attention or action from you"

Automatic trading removes emotional indecision and hesitation, he said.

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

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