Hi,
This is something that has played on my mind recently and wanted to start a discussion on it to see what other people's views are.
Man Vs Machine - Can discretionary traders take advantage of algorithms in the market and profit by doing so?
My view is that until a singularity event happens where a general AI is created that can critically think and adapt better than a human then every algo is just a form of a rational step by step process(both simple and complex) which are pre-programmed by a human being(possibly by machine learning/AI, but this would still need significant human input without a general AI).
If a market is mainly formed of human beings then understanding human psychology and controlling one's own psychology is the way patterns can be found and taken advantage of. However, in a market that is being made up of more algos than humans those same patterns may not still exist. That doesn't mean no patterns exist, they would be instead based on understanding the underlying step by step process of the algos themselves or the unintentional human psychology built into the algos.
In my view it may be even simpler to find algo patterns rather than human patterns because algos are 100% rational. For example, if you knew an aglo will do a after xyz and b if not then this could theoretically be taken advantage of.
Clearly this is easier said then done.....
I might just be thinking garbage. What's everyone's thoughts?
Thanks
This is something that has played on my mind recently and wanted to start a discussion on it to see what other people's views are.
Man Vs Machine - Can discretionary traders take advantage of algorithms in the market and profit by doing so?
My view is that until a singularity event happens where a general AI is created that can critically think and adapt better than a human then every algo is just a form of a rational step by step process(both simple and complex) which are pre-programmed by a human being(possibly by machine learning/AI, but this would still need significant human input without a general AI).
If a market is mainly formed of human beings then understanding human psychology and controlling one's own psychology is the way patterns can be found and taken advantage of. However, in a market that is being made up of more algos than humans those same patterns may not still exist. That doesn't mean no patterns exist, they would be instead based on understanding the underlying step by step process of the algos themselves or the unintentional human psychology built into the algos.
In my view it may be even simpler to find algo patterns rather than human patterns because algos are 100% rational. For example, if you knew an aglo will do a after xyz and b if not then this could theoretically be taken advantage of.
Clearly this is easier said then done.....
I might just be thinking garbage. What's everyone's thoughts?
Thanks