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Can someone explain how AI is being used in the market
Posted on 8/10/23 at 3:29 pm
Posted on 8/10/23 at 3:29 pm
It would obviously be good at finding buy/sell patterns (bull/bear flags), but there has got to be people making huge money off AI selecting the market.
6
Posted on 8/10/23 at 3:45 pm to Shamoan
I think you might need to re-evaluate what you consider "AI". As I am assuming the latest "AI" craze is what is driving this question.
Algorithmic trading models have been around a long long time. Basically the majority of all trades are done by a computer, and people have been refining them at major investment banks since forever.
Algorithmic trading models have been around a long long time. Basically the majority of all trades are done by a computer, and people have been refining them at major investment banks since forever.
Posted on 8/10/23 at 3:55 pm to UltimaParadox
Neural networks can do predictive price analysis.
Posted on 8/10/23 at 4:46 pm to FreddieMac
quote:
Neural networks can do predictive price analysis.
If true, and if they’re allowed to trade themselves, then frontrunning them will be the trade du jour.
The randomness of the market is what makes it efficient.
Posted on 8/10/23 at 5:13 pm to Shamoan
Look up Lemonade Insurance company's use of AI from a couple of years ago to get a feel for how it's used in claims, underwriting etc. Regulators hit them with huge fines because their AI was too good and perceived to target the uneducated/minorities. They could underwrite and quote you down to the penny based on your voice for example. Basically if you used too many slang words as one example showing your IQ and EQ (emotional lack of self control) levels being below average, then they could add surcharges to your proposal as you would inherently be a higher risk on the road, in a house etc.
This post was edited on 8/10/23 at 5:23 pm
Posted on 8/10/23 at 7:30 pm to Tomatocantender
Very interesting
Posted on 8/10/23 at 8:13 pm to slackster
quote:Like Navider Sarao did 13 years ago...
frontrunning them will be the trade du jour.
Posted on 8/10/23 at 8:37 pm to Shamoan
AI for the most part is used to find patterns. So, first you would need quality data or perhaps a unique perspective of data. Then you would use AI to find unique patterns and/or correlations. Once, you have trained your AI, you could use it in a variety of ways.
This post was edited on 8/10/23 at 8:53 pm
Posted on 8/10/23 at 8:39 pm to The Baker
quote:
google jim simons
I’m applying for a job as entry level janitor at Renaissance Technologies… just so I can get in on the Medallion Fund.
Yeah, Simons hires math super geeks… who don’t know or care anything about stocks. It’s all about quantitative analysis and algorithmic pattern recognition in his/their world.
Posted on 8/10/23 at 8:43 pm to slackster
quote:
The randomness of the market is what makes it efficient.
It is neither of these.
Posted on 8/11/23 at 9:42 am to Shamoan
It’s being used to fleece fools just like companies were when “blockchain” was the buzzword du jour.
Posted on 8/11/23 at 9:57 am to Decisions
quote:
It’s being used to fleece fools just like companies were when “blockchain” was the buzzword du jour.
That is true
Posted on 8/11/23 at 3:38 pm to slackster
quote:
If true, and if they’re allowed to trade themselves, then frontrunning them will be the trade du jour.
The randomness of the market is what makes it efficient.
This has been used for ever, I have head stories in journals about using genetic algorithms to monitor a stock price and predict if it will rise and fall. This is not new stuff.
Posted on 8/11/23 at 5:16 pm to CHGAR
quote:
It is neither of these.
The market is neither efficient nor random?
Posted on 8/11/23 at 5:22 pm to FreddieMac
quote:
This has been used for ever, I have head stories in journals about using genetic algorithms to monitor a stock price and predict if it will rise and fall. This is not new stuff.
I’m not talking about algos. Also, algorithms aren’t as good as people seem to give them credit for around here.
Posted on 8/11/23 at 7:06 pm to slackster
(no message)
This post was edited on 8/11/23 at 7:11 pm
Posted on 8/11/23 at 7:09 pm to Shamoan
quote:
here has got to be people making huge money off AI selecting the market.
Algorithmic traders have been using AI and machine learning for years.
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