Short YouTube transcript excerpt (speaker: Kosta Ouzas) discussing challenges in algorithmic trading: it’s comparatively easy to build an algorithm that makes money in one market regime but hard to sustain profits across bull and bear markets; automated systems must survive drastic market changes, and providers should place average retail users in the safest possible vehicles.
It's relatively easy to make an algorithm start to make you money. What's very difficult is to get it to keep making you money. When you buy huge bull markets and bear markets, these very big thrashes, if you're creating an algorithmic trading system, it has to survive all these environments. Very easy to make something make money on the way up if you're going to short easy on the way down. What happens when you have these drastic changes and what happens as a company if you're giving an algorithmic, fully automated system? The average Joe, he doesn't know what's going on, right? So you've got to put them in the safest vehicle possible to survive everything.
