We present the promised second part on the use of AI tools in trading. In it, we show how the new tools can be used in an example fund. It consists of discrete traders and the head is a trader who has practically been trading oil for several decades. Part I can be found in the first issue of our magazine.
The ChatGPT-4 interview about trading, for simplicity’s sake, takes the form of a conversation with a live person. The development of AI will go through several stages, the first two of which are: treating AI as a tool and treating AI as a colleague. The latter we understand – treating as an assistant or colleague at work.
Trader’s decision making process in trading is one of the most important concepts for me. Why? Trading results depend on it. So, what is the decision-making process in trading?
Can traders compete with computers?
The question is how much traders outside of the large funds will be able to compete with a computer that has the decision-making process of the best traders encoded and places positions in hundreds of markets simultaneously I leave open. I don’t think it’s that hard to answer.
A fierce battle is underway for better returns, reduced risk and faster entries. It is Alternative Data that gives traders and funds the biggest advantage today, not AI. The time of AI dominance is yet to come.
The use of Alternative Data is the current super trend strongly shaping the present and future of investing.
It is a revolution more important than the revolution that Artificial Intelligence will give.
I recently spoke with an elderly gentleman – a trader and fund owner. This conversation inspired me to write an article about AI tools that are used in trading today.
