The party may be over for automated trend-following trading strategies on Wall Street. As a recent report by Bloomberg highlights, the once legendarily profitable investment systems run on computers by hedge fund managers have lost their edge. Although still dominating a large share of capital compared to human traders, the machines are not as invulnerable as they once were. Wild volatility in the Dow Jones and other major US stock market indices makes that abundantly clear. Smooth economic cycles are one thing, but unnatural monetary policy from the Federal Reserve – alongside market-shaking tweets from Donald Trump – are something
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