Will an AI course help me with trading?

Discussion in 'Automated Trading' started by WallstYouth, Sep 29, 2006.

  1. I just want to know if learning AI in general will help with writing more sophisticated trading strategies thanks.

    I can take it as an elective next semester. The course covers such topics as:

    Heuristic Search: Best-first search, hill-climbing, genetic algorithms
    Logical Reasoning: Deductive inference, unification, forward and backward chaining, resolution
    Statistical Learning: Neural networks, Perceptrons, backpropagation, support vector machines
    Knowledge Representation: Propositional logic, first-order logic
  2. Thoroughly learn the various types.
    Learn how each accomodate different environments.
    Learn how to implement them judiciously.
    Learn about general data analysis and run-of-the-mill statistics.
    Consider virtual physics.
    Stir all that knowledge up in a pot.
    Then incorporate observations and some mental imagery.
    You then have a good recipe to apply it all as a "trading scientist".
    This is how I enjoy trading.


    Btw, I'm assuming you have programming skills.
  3. foible


    Take the AI course because you want to learn about how computers work, and how to program some very cool things.

    But as you'll learn, the term "Artificial Intelligence" is grossly misleading. It is basically a term which allows efficient searching over a problem domain, but all of the intelligence is in the inputting of data and the construction of the data structures/search algorithm. None of these will help you trade unless you are already an expert trader (or have the dedicated support of expert traders who will work with you for months or years to build the system).

    If you want to learn how to trade, AI isn't going to help you, sorry.
  4. Hi foible. I agree with what you've said except that if someone is completely familiar with data analysis and basic understanding of trading itself, that person can prevail "in spades".

    I say this because all the information is in the data.

    The question naturally is... how good is the analyst at interpretting it... how good is the analyst with derivation... and how good is the analyst at applying what has been derived. Imo.
  5. foible


    Is this AI or data mining, or maybe unrelated to computers and just quant analysis?

    Looking over the subjects that this person listed, I don't see anything that would directly help him trade. I imagine some sort of database class which covers data mining would be helpful. Better yet, take statistics :)
  6. AI is an extremely interesting, interdisciplinary, subjective class of mathematical tools. It will force you to be knowledgeable in the subclass disciplines as well. So no, just knowing something about AI itself isn't worth a salt without the encompassing knowledge, imo.
  7. My answer would be yes, the general knowledge, layer structures and training will be useful in certain applications for system writing and implementation.

    The course will probably be general in terms of depth covered but beware, this is a very time consuming approach and one may easily get off course from their original quest.

    Stay focused on your goals and enjoy the class.
  8. I believe that armed with all this knowledge, you will be able to apply these nn software packages understanding how they have to work and why they prodice one or another result. Overall, you will see whether AI is good for your trading or not.
  9. I might be interested in taking the course.
  10. As of this writing,

    100% AI or expert systems will simply lead to curve fitting the markets.

    With any tool, more sophisticated it becomes, more responsibility is required to control it.

    If you can't make a profit trading with systems developed by Tradestation, Wealth-Lab or Excel you won't make it with anything more sophiticated... It's like me trying to play golf with a $100,000+ set, I'm still no Tiger Woods (He'll probably play better than me with only a $10 putter)
    #10     Nov 10, 2006