When do you think AI will dominate trading field?

T

trade5656

all over the world companies invest in AI/machine learning and that field is developing exponentially, time will come that AI will perform nearly every possible task faster and better than any human can possible do (already happens in a lot of fields and robots starting to take jobs from people faster and faster)

when do you think that will happen to trading? when will AI become so powerful and intelligent that it will be able to beat any human in that area with ease?
 
What is your definition of "AI" ? Algorithmic trading already makes up the majority of the volume in the equity markets.
 
It's AI against AI, the only thing that will rate limit are news events. So ultimately most of the time prices stabilize and AI's will try to 'market make' each other during non news times. During news times, prices will have more momentum in a specific direction that wins since AI logic wouldn't go against the breakout, unless counter parties open interest decreases as they admit defeat.
 
Xela said:
Depending slightly on your definitions, perhaps, I think "it's already happened" is a perfectly reasonable perspective.
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my point is, there will be time when big companies,hedge funds, will have so much computer power and so strong AI/algoritms that they will simply crash all the "small" (retail/individual) traders and the latter won't be able to survive in trading at all

but the question is when is this going to happen?
 
Intelligence, Artificial or otherwise is not required for trading success.

Algos needed for trading profitably are dumb, rote routines that follow or react to market action.

Markets cant be predicted with any accuracy.

Being extra smart isnt much of an advantage in trading.
 
Just a matter of time now. But how long ?
Nobody knows.
But if there really is an AI expert analyst prog out there do you really think they are going to broadcast it ? Of course not.
 
AI isn't some magic bullet. "Deep learning" (which is what is driving all the buzz right now) is just high dimensional, non-linear curve fitting/classification. Don't get me wrong, its all very useful for well defined problems....but, it is nowhere near the market equivalent of SkyNet. The machines are nowhere near self aware. They can be very succesful at capturing a very specific opportunity, but a transformational innovation in the state of the art will need to happen if the market is going to find itself in a stalemate due to the machines being too smart.
 
AI is here and HFTs are using it to record & analyze your trading in order for them to take your money when ever you are day trading. "At a poker table if you cant spot the sucker... than you're probably it"
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"the best HFTs have an impeccable understanding of the market micro-structure: what happens after you submit an order to your broker? Where does your order go, how is it executed, how are orders prioritized? HFTs are experts on this, but very few retail investors even understand the basics."

"HFTs can model other traders’ behavior. When someone trades through Scottrade or Interactive Brokers, their order has a unique number attached to it – the same number every time a client places an order. This number is bundled with all relevant trade information (time, price, etc.) and sold as an encrypted “enhanced data feed.” An HFT can then use those past results to predict the trader’s behavior"

"TCR: So HFTs try to predict what you’re going to do before you do it. Do the brokers admit to selling this information? Can traders opt out?"

"GARRETT: This data is standard and available to anyone who wants to buy it, so it’s not that HFTs are purchasing illegal information. But the data set is huge and is only of practical use to players with very fast and powerful computers – meaning HFTs. And yes, most brokers I have encountered will allow you to opt out of having your unique number attached to your information."


"To be clear, I’m not saying HFTs track your individual account and literally jump in front of you right before you trade. But they do use this information on the aggregate to model traders’ behavior. So an HFT could have a very good idea of when traders on, say, E*TRADE’s book will enter into a certain transaction."

http://www.zerohedge.com/news/interview-high-frequency-trader

With Windows 10 what you do on your computer is no longer private at all, you signed away all your rights to your privacy. It can be and probably is resold to the highest bidders. I would think that the big HFT's like Citadel would pay for active traders info. Imagine that, they have all your computer data, all your historical trading info, and can DB this into their super AI computer along with everyone else - now they control the aggregate order book on a level beyond belief. That is why many previously successful day traders from the pre HFT era have adapted by trading less and holding longer term to get some transparency- like hours, days, weeks, months, etc. You got to be smart like a fox to make it trading these days with the majority of quotes being spoofed by HFT's.
 
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my opinion is that AI is very good at deterministic modeling - those things where inputs and outputs are governed by certain relationships that can be modeled (even mildly chaotic relationships). These could include things like weather forecasting, medical diagnosis (robotic doctors/surgeons), software that could replace accountants+lawyers, self driving cars, etc.

But the financial markets are something else altogether - they do not follow any physical or natural laws. Daily price movements are governed by factors that are at least an order of magnitude more complex and discontinuous than any other system we know of. I don't think there will ever be an AI program that will achieve 100% accuracy in predicting market price direction one day in advance. If such a program came about in the future, there eventually would be multiple players competing for the same profits, thereby reducing the forecast efficacy.
 
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