Richard says he is not worried about computers that can trade. Others have told me they aren’t worried either - they believe there will always be ways for a human to make money in the markets. They could be right, but I don’t think so. I think it is only a matter of time before even the best human traders (without the help of AI) cannot make consistent profits in the market. Here is a comment I just added to his post:

Basically it comes down to this: computers are getting smarter and smarter. Not just in a brute-force way - they are getting more intuitive and creative. They are really becoming smarter, with pattern-recognition capabilities that are beginning to rival those of humans. Eventually they will be the best traders.
Trading is a lot like poker, and look at the progress of poker-playing AI. I think it is important for traders to watch this progress in poker. When computers dominate poker, as they now do chess, it will be more clear as to how they will also dominate the market.
I don’t think even the best unassisted human brain will be enough to compete with this AI in 10 years. I think it will be like playing Deep Blue. Over time it will just be better and take your money. Why is it so hard for traders to make money in the markets today? Because it is competitive, we all can’t win, and there are really smart, good traders to compete with. Smart AI is currently and will continue to be a growing part of this competition.

This entry was posted on Saturday, November 3rd, 2007 at 5:46 am and is filed under ATS, chess, futures, poker, trading. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.