AI for trading
Reddit Comments Overview
Redditor shares experience with AI for stock trading, realizing it was mostly luck, not AI:
- Pros: Initial success, access to private stock forums.
- Cons: Relied on luck, short-term success, algorithms may stop working.
Discussion on the capabilities of AI for trading:
- Pros: Possibility for industry-scale trading platforms to generate profits.
- Cons: Limited access to resources like Bloomberg Terminal for individuals.
Renaissance Technologies highlighted for their success in AI-driven trading:
- Led by famed mathematician Jim Simons.
- Medallion Fund has impressive returns.
- Early adopters of big data and machine learning in the 90s.
Real Science vs. Trading Bots: Emphasis on the importance of hypothesis testing in developing profitable trading bots and avoiding biases.
User suggests using an octopus or buying and holding SPY for a winning strategy.
Optimism and skepticism surrounding AI in trading:
- Views on AI rapidly developing with earth-shattering consequences.
- Doubts on AI's ability to outperform humans in complex markets.
Ethical concerns raised about AI trading and stock market predictability.
Discussion on Complexity and Chaos in Stock Markets: Views on stock markets being chaotic systems and challenging to model effectively.
Arbitrage Trade Strategies Examined: Insights into arbitrage trading and maintaining profitability in trading.
User highlights AI trading algorithm success but acknowledges the need to be within certain circles to access it.
Summary
- AI for trading is seen as providing a potential edge but limited in short-term gains, often reliant on luck.
- Renaissance Technologies stands out for their successful AI-driven trading strategies and historical returns.
- There are mixed opinions on the effectiveness of AI in trading, with emphasis on understanding market dynamics and the limitations of individual traders compared to institutional setups.
- Challenges such as market complexity, unpredictability, and ethical considerations surround the use of AI in trading.
- Suggestions range from using basic strategies like buying and holding to more sophisticated algorithmic trading approaches in the stock market.
