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I just watched a Youtube video about an AI machine called "Libratus" that was only taught the basic rules of poker and over time learned how to play against and dominate the World's best poker players. "We have not programmed the strategy for poker, we have programmed the algorithms for solving imperfect information games." "We taught it the rules of poker, and then the program found the optimal strategy."
I know AI trading has been around for a long time, but a lot of it is just simple blackbox and automated stuff that doesn't learn over time. How much machine learning trading is taking place do you think? Should we be worried?
Can you help answer these questions from other members on NexusFi?
I used to think and worry about these issues as well.
In my opinion, these examples only relate to AI vs humans. The market isn't a 1 vs 1 game and it is very unlikely for only one AI to be in the market trading when the time comes. As the market has always been changing along with the humans who participated, the market will just change to accommodate the AIs making the trades. Plus, one AI isn't allowed to be so big that it ends up manipulating the market as this is illegal.
This leads me to conclude that it is just going to be a matter of adapting to the market (finding new patterns?) as traders always have been.
Anyway, I believe there were other threads regarding this topic somewhere.
At the end of the day, AI trading is all about pattern recognition. They decide what to do based on past experience with the same of similar set of variables. Whatever AI trading does will be reflected in price like all the other market participants. …
