Absolutely. Anyone with a lick of sense can figure out that houses with 100's of billions aum are way ahead of the game. My point was that those houses don't sit on the myriad of data that someone like IB or Schwab hold, and aren't sharing. Yes Citadel has a long list of high dollar clients, but their trades are initiated from within based on their own algo's read of the markets... IB has a readable success/failure database based upon the actions of millions of traders worldwide. Ditto Scwab and even Robinhood to some extent. Can anything be gleamed by a deep analysis of millions of successful and unsuccessful trades when also taking into consideration all the extraneous minute by minute data.... hey, that's what Blackwell was made for. Everything from the height of a one minute candle on a given day 5 years ago.... to the temperature and degree of cloudiness in NYC that day when all the traders were coming to work. You get the idea. Either way, I think you're agreeing with me... over the long haul, outside of one off events, the volatility is going to flatten. The entire game is driven by algo's with unlimited funds battling each other. It has nothing to do with anything else. News events are nothing more than an excuse for the bigger algo to take money from the smaller algo's. As retail players lol... all the science, book reading, candle studying, and everything else... is a waste of time. Learn to think like a computer that plays chess.
I know where you're coming from but I'll balk at agreeing completely. I don't think studying is ever a waste of time. It can be its own end. In terms of "learning to think like a computer"... well, that's why I put "AI models' in quotes. It's really the other way around, the challenge is to get machines to think like humans. And, materialism aside, machines don't have the slightest grasp of metaphysics. Therefore the models people build still need to be evaluated and considered by a human. Nonetheless the algos are helpful and serve as wonderful extensions of our faculties. This leads me to think there can still be times of great pessimism. The new Tesla's will occasionally crash head long into stuff if the driver isn't paying attention. And, the cars can't tell the driver where to go, only how to get there. Interesting times of advancement for sure, bit I still expect bouts of volatility (perhaps exacerbated by tech). Remember when Knight Capital pushed a bad software update and lost $440 million? I'm going to stay mindful and remember the machines still serve us, not the other way around. Anyway... glad to see you back VZ. Hope you had a good vacay from the usual nonsense we see here on ET
AI = the more things change, the more things stay the same. If AI, in the hands of the powerful few, takes over the markets ... there will be no markets.
Interesting topic. The trading simulator that I developed is generating quite a bit of trading data and I do plan to train an AI model on that data for various use cases. OP is spot on.
One thing that comes to mind is that they would be better at predicting nlv-path and risk of individual clients based on their characteristics, thereby pinning margin requirements to a more individual level (racism?). Just a bit rambling though
Another random thought: will momentum strategies go extinct, or will they become even more prominent? I would think, at first sight, the latter