TY - JOUR T1 - Be Wary of Black-Box Trading Algorithms JF - The Journal of Investing DO - 10.3905/joi.2019.1.090 SP - joi.2019.1.090 AU - Gary Smith Y1 - 2019/05/10 UR - https://pm-research.com/content/early/2019/05/10/joi.2019.1.090.abstract N2 - Black-box algorithms now account for nearly a third of all U. S. stock trades. It is a mistake to think that these algorithms possess superhuman intelligence. In reality, computers do not have the common sense and wisdom that humans have accumulated by living. Trading algorithms are particularly dangerous because they are so efficient at discovering statistical patterns—but so utterly useless in judging whether the discovered patterns are meaningful.TOPICS: Quantitative methods, risk management ER -