A Smarter Computer to Pick Stock

Quote from jwecme:

I have often thought about what the future holds in respect to this, my best advice is to watch Terminator. A land goverened by Arnold it makes me shiver, hang on ...........
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Every era has it's wild-eyed futurists.
In 1970 it was Alvin Toffler... today it's Kurzweil.

Has anybody bothered to check Alvin's 1970 "Future Shock" predictions?

In addition... very importantly...
We are in an era where Talk Radio is dominated by completely ridiculous UFO and Conspiracy shows...
So clearly millions of people will believe almost anything...
And the critical thinking faculties of the average 21st century man have been COMPRIMISED and NUMBED.

Also... very importantly...
As a Computer Science graduate (1982)...
I have been watching the Artificial Intelligence field for 25 years...
And there is no greater example...
Of Wild Predictions leading to minimal real-life advances... than in the AI field.

Also...
Firms like DE Shaw where not mining esoteric patterns with esoteric nets...
But applying standard quantitative techniques in an very OPTIMAL ways...
And finding and exploiting ** garden variety ** market inefficiencies.

Since I am totally skeptical of anything Kurtzweil says on principle...
And he certainly has more to learn about running a hedge fund than the Great Ones have forgotten...
I would tend to just IGNORE him (I do have his book).
Academics and others... always fall flat on their face when up against Market Pros.

One word: hubris

As for the ACTUAL Fund Managers applying advanced techniques...
They are well worth studying closely.
 
If someone invents a forecasting system that is 100% correct and the general public get hold of it then that is the end of the market as everyone will know which way its going and act accordingly.
Might lead to a resurgence of horse racing or something.
 
pfft thats not the future of the financial markets......noobs.

the real future was mentioned in the article though :P, nanobots.

once that technology advances to the point these nanobots can control brain functions remotely they can be seeded into the right people and on que cause decisions to be made in unison amoung millions of individuals to send a particular market in a particular direction.
 
And may this remain so....Thanks Mr. Hershey..You are a champion for some small traders.


Quote from jack hershey:

The limiting case of machines colluding is smoothing.

I really like how the focus of big money is to go more and more macro to take smaller and smaller profits on many many small imbalances.

LO is cool and Sloan must loved him and his dialogue with the troops. Learning is important and I think it is fun to observe the smartest minds coming down the pipeline.

The inventor's videos on discovery are terrific and it is even better to anticipate the duel between his support of EMH and Lo's CMH. All reported out as said a while back.

So now we are in ET and looking at how the diferent market players will be affected: the pro's here and the amateurs here.

All of these guys in ET who are getting the job done would have been laughing at both Lo and the inventor. It is extremely well known that we need to have the big money doing their thing.

The basic reason is to be assured in a rock solid way that someone out there is going to be running a sales campaign to POOL more and more capital. NEWER and FASTER are watchwords of the big money to add to their pools.

I dig that they will be handling the 1:15EST daily "reconciliation" in bigger and faster ways. Guys I admire most who are pros are people that DO NOT have to deal with big money and are in offices with small teams that creme the market ALL the time.

Absolutely none of them are tuned to the article's palaver by a reporter who goes to meetings and writes articles. I should sit down and write up my notes on a session of four of the hottest small group pro guys I have ever sat with for two hours or so. They do in a week what is posted as an annual in the article.
I had some personal time with each just as a matter of passing time since we were in the same place.

Amateurs could care less about what big money and big computers are doing to solve the classic big money problems. Small groups of amateurs sitting in an office the size of the killer pros offices mentioned above is my choice of where to be. What is the contrasting draw of this space? It is activity that is the same as the killer pro's space.

What goes on during the day to make real money with capital is where the real action is.

Trading individual capital by either killer pro's or hot amateurs is not very different and it is so very different than the eeking done by the big money and new fast computers.

The hottest transaction cost group serves big money and it is sure not in NYC or London. But is just an eeker thing as well.

This thread is about the article and the names in the article. So be it; I said my piece.

Amateurs and small pro's need to have a forum on really getting the job done. Not here in this thread but maybe somewhere.

Using more and more to get less and less is the reporter's take on the future. Neat. It will smooth things out. The name of the real game is small people draining the huge infinite pool as fast as possible.

Killer small pro's and hot amateurs do that. And it is ALL out of the box thinking and IMMEDIATELY available!!!
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Quote from traderNik:

It's not clear whether this response is meant for Av or for the author of the article he posted. Either way, it seems rather pointless.

Av, how about this; inasmuch as fundamental market conditions will continue to determine the direction of these instruments at given times (stocks, commodities, whatever), there will always be room for individuals to trade the trend and compete with the most sophisticated machines.

Yes? No?
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Directed at the Times article... This kind of nonsense is sign of a market top.

Once again, I agree with HoundDogOne's points.

Did anyone even look at Kurzweil's web site (www.fatkat.com)? It refers to Rentec as a "relatively small fund". come on!
 
I'm working on a new numbering system. It would specifically be used for forecasting, and not for counting the buttons on your jacket etc.
I would tell you guys all about it but I haven't invented it yet - so maybe next year or sometime.
 
may have been posted somewhere already but i didn't see it.

http://www.timesonline.co.uk/article/0,,5-2497900,00.html


The Times December 11, 2006


Computers that digest the news to change trading
Dan Sabbagh, Media Editor

Reuters 'tags' its own articles
Is the City trader obsolescent?






Computers that read news stories and use the information gleaned as a basis for trading will become widespread over the next five years, Reuters said yesterday.

The information provider will make available today a tagged version of its news feed — which provides 8,000 news stories a day — to make them easier for computer-based trading systems to digest. It describes the effort as generating “machine-readable news”.

Peter Moss, the head of Reuters Enterprise Solutions,said: “In three to five years a much more sophisticated set of algorithmic trading will emerge, based on information as well as market data.”

Today about 60 per cent of trading in the United States is conducted by computer; in London the proportion is estimated to be 40 per cent. But the trading patterns used by algorithmic systems are based principally on price and volume data, although the situation is changing fast.

Computers reading news — in effect, trying to simulate human judgment — signals the beginning of the end for the brash City trader. It heralds an era in which human intervention in trading systems will be dominated by programming and monitoring computers.

To help banks and hedge funds to generate their own trading models, Reuters is also making available a news and price archive dating to January 2003. That is intended to help to develop and test trading models based on historic information. Massive amounts of data are involved: the archive will include nearly 12 million news items and pricing information is updated up to 23,000 times a second, which includes data obtained from 258 exhanges and markets around the world.

Richard Brown, of the company’s machine-readable news programme, said that such systems will help computers to gauge how far the market will react to an earnings miss — but may also help to forecast an economic or political surprise by detecting a “flurry of news stories” before the crucial moment.

Initially, Reuters is supplying only its own news stories and it is asking its own journalists to help to tag the stories with five to ten key items of information. Through licensing agreements, the company could supply news stories from newspapers and other outlets.

However, the information provider believes that its clients will develop tagging systems of their own. “This is a stealth technology,” Mr Brown said, noting that many of the company’s clients refuse to disclose how they hope to use the data.

Reuters expects that computers will be able to weight news stories based on the language used to evaluate how tenatative they are — and check the byline to establish whether it has been put together by a specialist in the subject in question.
 
As I said before, all the more reason to operate below the institutional liquidity threshold or trade stocks controlled by a good old fashioned manipulator who mops up the float and then ramps it up and dumps it on the suckers the good old fashioned way. Won't be long before he/management's learn how to manipulate the keywords in their press releases..................but then again, as Livermore said, the headlines are for suckers.
 
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