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The Trader in the Algo Era

Traders Magazine, January 2005

Peter Chapman

Traders who make their reputations on relationships and negotiating skills are a dying breed. At least that's the conclusion of TowerGroup senior analyst Gavin Little-Gill, who recently tackled the complex subject of algorithmic trading. Little-Gill suggests that the trading desk of the future will prefer traders with the mathematical and programming skills to negotiate an increasingly electronic and quantitative marketplace. Little-Gill expects the algorithmic trading of buyside order flow to double through 2006. Defined roughly as computer-managed trading that tracks a benchmark, algorithmic trading will grow 20 percent in 2005 and by 27 percent next year, according to a TowerGroup report by Little-Gill.

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