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NoiseLiving and Trading in Electronic Finance$
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Alex Preda

Print publication date: 2017

Print ISBN-13: 9780226427348

Published to Chicago Scholarship Online: September 2017

DOI: 10.7208/chicago/9780226427515.001.0001

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Talk in Trading, Talk for Trading, Talk of Trading

Talk in Trading, Talk for Trading, Talk of Trading

Group Communication in Electronic Markets

(p.145) Chapter Five Talk in Trading, Talk for Trading, Talk of Trading

Alex Preda

University of Chicago Press

This chapter investigates forms of collaborative activities in online trading. While a common image of trading in electronic markets is that of relentless, individualized, and atomistic competition, retail traders actually constantly collaborate with each other in trading. They communicate while trading, and they build groups in order to solve specific, trading-related issues. Based on participant observation over more than a year in trading groups, and on interviews with group members, this chapter examines how traders communicate with each other in trading. It investigates the activities deployed by groups of traders, arguing that both the institutional setup and the format of electronic trading make such collaborations necessary. Online collaborations enable observation and the formation of shared pools of experience as the basis of decision making. Online collaborations also make possible performing more difficult tasks, such as building and testing trading robots, which would be very difficult, if not impossible to conduct in isolation. Overall, the chapter argues that trading should be seen as a group activity rather than an individualized one, and that the standard assumptions about trading as an individual decision making process do not fit observations on the ground.

Keywords:   communication, trading groups, experience, trading robots, collaboration, decision making

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