Has machine learning, AI killed killed short-term trading opportunities?

Discussion in 'Commodity Futures' started by helpme_please, Jan 26, 2018.

  1. Interesting to note that this hedge fund manager, Stephen Jamison, thinks that AI has killed short-term trading opportunities in commodity trading. Given that his fund size is $1.5b, he must be quite a formidable commodity trader. He has given up and closed his $1.5b fund.

    Do the elite traders share his views? Has short-term trading opportunities really disappeared in your own experience?

    https://www.reuters.com/article/us-...-jamison-capital-to-shut-source-idUSKBN1FE2TI

    In his letter, Jamison said machine learning and artificial intelligence has eliminated short-term trading opportunities for the firm, and long term, commodities do not offer any obvious benefits.
     
    d08 likes this.
  2. speedo

    speedo

    No, it's nonsense.
     
  3. ML could barely make 40% per annum with the army of PhD`s
     
  4. The "race to zero" type stuff is not a problem for us normal traders.
     
  5. Has machine learning, AI killed killed short-term trading opportunities?
    Let's check.........Sold Nikkei at 23620.........hold on a second............................................exited at 23615.
    Ok, short term trading is still alive!!

    Short term trading opportunities will always be there as long as there's someone who disagrees with you.....even if it's a machine!
     
    Last edited: Jan 26, 2018
    nickynoes, Sprout, speedo and 2 others like this.
  6. Overnight

    Overnight

    Morons. The opportunities are there. Just need to know how to trade what you can with what you have. When trading physicals you HAVE to know the underlying fundamentals. NG and CL do not suffer pure TA well. I learned this early on and didn't need a billion dollar hedge fund to learn it. Just little 'ol me.
     
  7. After 2 years of aggressive trading, I've learned that news is nothing more than articles of English literacy with intricate word construction to devised by journalists and their editors to sell more ad clicks. They serve the newspaper men and the subject in question. Both have an agenda in the piece

    Here's an excerpt from another trading legend, Andy Hall, who blamed AI for his Crude oil losses.

    https://www.stockinvestor.com/31139/myth-wall-streets-masters-universe-exposed/

    Hall blamed the rise of “algorithmic trading systems that have come to dominate oil trading” for the failure of his fund.

    As the Oxford and INSEAD-educated art collector Hall put it:

    “Investing in oil under current market conditions using an approach based primarily on fundamentals has become increasingly challenging. It seems quite likely this will continue to be the case for some time to come.”

    What a bunch of bunk.

    Andy Hall had to shutter his fund because he had poor risk control. Believing his own hype, Hall made a big bet on the price of oil. He did not cut his losses when the market turned against him.


    How do I know that?

    Oil trading is a zero-sum game.

    Even as Andy Hall was losing money on oil, traders on the other side of the trade made the same money that Hall lost. Hall’s blaming his losses on the rise of “algorithmic trading” is a red herring. Trend-following strategies have been “algorithmic” since at least the 1970s.

    Hall and Jamison are looking for people to blame on their lack of diversification on their large 1.5B+ fund. When you have a fund that size, you can't bet everything and go big with long on oil. Work hard and split your fund across multiple non-correlating assets. At the least, start hedging your positions!
     
  8. No, let me repeat this. There are ALWAYS opportunities in short term trading, medium term trading, long term trading! Always. Period.

    But you have to constantly adapt and change to the environment. Can't blame algorithmic trading, can't blame AI, and can't blame ML or whatever latest flavor of the month is.

    Really really studied TA and develop your own ideas, intuition, and systems about how prices move and you are set.

    I'm not saying I'm there yet.. Just saying that's how markets work.

    But perhaps certain type of microtrading might not be as profitable as before. HFT guys are much faster than the retail traders. But if you trade with a time horizon greater than a microsecond you should be fine. Which is pretty much everyone!

    These huge hedge funds that are losing billions and facing redemptions didn't or couldn't adapt to changing conditions. And had no good risk management.
     
  9. d08

    d08

    I'm not saying I'm there yet.. Just saying that's how markets work.

    Do you see the irony of that statement?

    But you have to constantly adapt and change to the environment. Can't blame algorithmic trading, can't blame AI, and can't blame ML or whatever latest flavor of the month is.

    Gain $20, lose $20, "okay, I think I know what I did wrong", gain $20, lose $20 again, "oh ok, I have to watch out for this" and so it goes. You don't fix something when things are working well and that itself is the problem, we cannot see every possible problem ahead.
    You don't live forever, there are more traps than you can fix and learn from.

    The optimism here is astounding.
     
  10. Then you should give up trading and just buy an index fund and go do something else. We are on a trader forum afterall. haha
     
    #10     Jan 28, 2018