The system allows the company to adjust certain risk settings, says
chief science officer Babak Hodjat, who was part of the team that built
Siri before the digital assistant was acquired by Apple. But otherwise,
it operates without human help. “It automatically authors a strategy,
and it gives us commands,” Hodjat says. “It says: ‘Buy this much now,
with this instrument, using this particular order type.’ It also tells
us when to exit, reduce exposure, and that kind of stuff.”
According to Hodjat, the system grabs unused computer power from “millions” of computer processors inside data centers, Internet cafes, and computer gaming centers operated by various companies in Asia and elsewhere. Its software engine, meanwhile, is based on evolutionary computation—the same genetics-inspired technique that plays into Aidyia’s system.
In the simplest terms, this means it creates a large and random collection of digital stock traders and tests their performance on historical stock data. After picking the best performers, it then uses their “genes” to create a new set of superior traders. And the process repeats. Eventually, the system homes in on a digital trader that can successfully operate on its own. “Over thousands of generations, trillions and trillions of ‘beings’ compete and thrive or die,” Blondeau says, “and eventually, you get a population of smart traders you can actually deploy.”
[---]
Whatever methods are used, some question whether AI can really succeed on Wall Street. Even if one fund achieves success with AI, the risk is that others will duplicate the system and thus undermine its success. If a large portion of the market behaves in the same way, it changes the market. “I’m a bit skeptical that AI can truly figure this out,” Carlson says. “If someone finds a trick that works, not only will other funds latch on to it but other investors will pour money into. It’s really hard to envision a situation where it doesn’t just get arbitraged away.”
Goertzel sees this risk. That’s why Aidyia is using not just evolutionary computation but a wide range of technologies. And if others imitate the company’s methods, it will embrace other types of machine learning. The whole idea is to do something no other human—and no other machine—is doing. “Finance is a domain where you benefit not just from being smart,” Goertzel says, “but from being smart in a different way from others.”
- More Here
According to Hodjat, the system grabs unused computer power from “millions” of computer processors inside data centers, Internet cafes, and computer gaming centers operated by various companies in Asia and elsewhere. Its software engine, meanwhile, is based on evolutionary computation—the same genetics-inspired technique that plays into Aidyia’s system.
In the simplest terms, this means it creates a large and random collection of digital stock traders and tests their performance on historical stock data. After picking the best performers, it then uses their “genes” to create a new set of superior traders. And the process repeats. Eventually, the system homes in on a digital trader that can successfully operate on its own. “Over thousands of generations, trillions and trillions of ‘beings’ compete and thrive or die,” Blondeau says, “and eventually, you get a population of smart traders you can actually deploy.”
[---]
Whatever methods are used, some question whether AI can really succeed on Wall Street. Even if one fund achieves success with AI, the risk is that others will duplicate the system and thus undermine its success. If a large portion of the market behaves in the same way, it changes the market. “I’m a bit skeptical that AI can truly figure this out,” Carlson says. “If someone finds a trick that works, not only will other funds latch on to it but other investors will pour money into. It’s really hard to envision a situation where it doesn’t just get arbitraged away.”
Goertzel sees this risk. That’s why Aidyia is using not just evolutionary computation but a wide range of technologies. And if others imitate the company’s methods, it will embrace other types of machine learning. The whole idea is to do something no other human—and no other machine—is doing. “Finance is a domain where you benefit not just from being smart,” Goertzel says, “but from being smart in a different way from others.”
- More Here
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