“One of the most helpful things that anybody can learn is to give up trying to catch the last eighth—or the first. These two are the most expensive eighths in the world. They have costs stock traders, in the aggregate, enough millions of dollars to build a concrete highway across the continent.”
It’s a classic story, and one with a seemingly certain ending: The human pits his emotion, intelligence, and passion against the cold logic of the machine. Sometimes the human ekes out a victory, but in the long run, the machine invariably wins—first in chess, then in Jeopardy, and now apparently in trading. This rule appears inexorable, but it need not be so.
For example, two Norwegian traders were able to outwit ...