Trading will be dead in next 10-20 years

viruscore1 · Feb 4, 2017

Ai will do away with trading, as computers and technology will do away with CPA's, Lawyer, Programmers, System Analyst, Auditors, Doctors, bankers, Financial Advisers, etc. I'm sure you all can think of some more. IMHO AI will play an important roll but not completely eliminate. Trading activity will accelerate with AI (expert system) tools. Already happening ...

lawrence-lugar · Feb 4, 2017

R1234 said:
trading is dead only when all markets move in a perfectly horizontal line.

I agree,
Trading will never die -- trading is as old as time itself. and death, and taxes, and racism. and good and evil and night and day.

...What a silly/nonsense headline and article.

Frederick Foresight · Feb 4, 2017

trade5656 said:
With the rise of the AI come the end to trading as we know it and retail traders

cdcaveman · Feb 4, 2017

Hft by in large is liquidity providing....It has value to the market... If you are getting eaten up by hft you are trading high frequency..

jrp · Feb 4, 2017

trade5656 said:
With the rise of the AI come the end to trading as we know it and retail traders

Ai is becoming so strong/powerful/cheap with time that it will eventually replace 99% of traders, the amount of info you can absorb in a month AI will be able to absorb in 1/10 of a seconds, it will structure it, use complex algorithms to analyze it and make decisions

And I am not talking about AI outsmarting everybody - that's not the problem.

Here is the case - trading game can only be profitable if there are A LOT of losers. With the rise of Ai and it's availability all the losers will get access to all those computing powers and will make WAY LESS mistakes, and THAT is what kills the whole trading game.

In theory in you give a program which will give decent trading advices to losers today (and with exponential growth of computing power and AI such things will be available in 10-20 years easily) than the game is dead, 99% of stupid noobies mistakes are eliminated and that is exactly what profitable traderss feed on, money have to come from somebody.

That already happened to online poker actually. In 2006-2009 (which is considered "golden era" in online poker) without actually no decent learning info for poker and any software to help noobies, pros were making RIDICULOUS amounts of money exploiting this. But right now there are a lot of software and charts the edge that pros have over amateurs is SO SMALL that it's not even worth playing poker for living.

For example in 2006 you could spent 1 week to learn some basics of poker and get some charts and you will be able to make 20k a month just by grinding basic SNG tournaments. What can the same player grinding same tournaments expect now? 500$ a month.

Even more, right now is going a huge challenge AI vs pro players. 4 of the BEST in the world heads up players vs AI. How is it going? AI IS CRUSHING THEM. AI is crushing THE BEST players in the world in heads up poker LIKE KIDS. Literally, his edge is SO BIG that it is really scary. (you can google about that challenge it is going right now)

So we are ALREADY at the point where the best of the best can't beat Ai in poker, they can't even breakeven against him and they are NOT EVEN CLOSE to that, they are crashed. They gather everyday, analyze the way AI plays, try to find weaknesses and improve their game but that doesn't help, they continue to lose.

Trading is next. That will happen eventually to the trading world too, we can argue how long it will take but it WILL happen, there will be time in next decade or two when there is just no room for retail traders anymore, the edge will get smaller and smaller and then it will be just not worth it, just like in the poker example.

If you are considering to START trading now I really advice you to think about the future of that "profession" because that future is not very bright imo.

Here is the difference between poker/chess algo and trading algo:
Poker/Chess has definite fixed hard rules. Well guess what, trading does not have any such.
That is why your analogy does not apply IMHO and there can not be a perfect trading system
because there are huge number of psychological/mathematical/data parameters in trading.

Cuddles · Feb 4, 2017

Will this become a videogame of Japan v. China v. US v. Eurozone to see who has the best coders? Sounds exciting....anyone have recommendations on brokers/funds that use algos heavily and have seen healthy profits?

viruscore1 · Feb 4, 2017

Here4money said:
Will this become a videogame of Japan v. China v. US v. Eurozone to see who has the best coders? Sounds exciting....anyone have recommendations on brokers/funds that use algos heavily and have seen healthy profits?

that is like saying " the typist who wrote the best novel"

Pekelo · Feb 4, 2017

If all 5 players at the poker table are AI, there is still a winner, right? That being said, OP assumes that all players are going to be winners in the futures in the markets. After all if your AI is a loser, why would you use it?

Now trends still will be trends, so humans still can ride trends. Also if too many programs behaving too similarly, there might be a crash coming. But pattern recognition still should work there might just be new patterns.

algofy · Feb 4, 2017

Pekelo said:
If all 5 players at the poker table are AI, there is still a winner, right? That being said, OP assumes that all players are going to be winners in the futures in the markets. After all if your AI is a loser, why would you use it?

Now trends still will be trends, so humans still can ride trends. Also if too many programs behaving too similarly, there might be a crash coming. But pattern recognition still should work there might just be new patterns.

Hate to say this but I agree with pekelo!! Lol

MoneyMatthew · Feb 4, 2017

helgen_1 said:
So you draw the conclusion that taking on 4 players in poker is the same as taking on the markets? How many players are there in, lets say the ES, on any given day? Are the players the same from one day to the next? From one month to the next?

Continuing my example of using the ES:
The ES is a highly mature market, it is arb'ed, spread and algorithm'ed to the n'th degree. Now, if you look at this week's trading action, would you say there are opportinities for a day trader to make some hay, or do you only see it moving up and down randomly?

I am not asking this because I want you to answer here in the thread, it is just to give you an idea of the questions you can ask yourself while you prepare for next week.

H.

I agree with you to a certain extent and the ES is a great example.

helgen_1 said:
So you draw the conclusion that taking on 4 players in poker is the same as taking on the markets? How many players are there in, lets say the ES, on any given day? Are the players the same from one day to the next? From one month to the next?

Continuing my example of using the ES:
The ES is a highly mature market, it is arb'ed, spread and algorithm'ed to the n'th degree. Now, if you look at this week's trading action, would you say there are opportinities for a day trader to make some hay, or do you only see it moving up and down randomly?

I am not asking this because I want you to answer here in the thread, it is just to give you an idea of the questions you can ask yourself while you prepare for next week.

H.

I agree with you to a certain extent and the ES is a great example. I have an algo that I wrote that ranks markets based on "ease of trading". The algo is highly subjective but the ES consistently ranks dead last. ES is clearly one of the toughest markets yet it attracts newbies based on low entry margins.

This notion that trading will die in 10 to 20 years is insane to say the least. Maybe extremely short-term trading (sub-minute and possibly sub-10 minute time frames) will be dead but daily directional plays and weekly plays? I highly doubt it.