Robots will treat humans like “pet Labradors”.
Elon Musk Tesla Motors.
Speaking at a recent technology conference, founder of Apple Steve Wozniak said that at first the thought of artificially intelligent beings in charge of everything scared him. But now it’s a comforting thought. Fast forward hundreds of years to when robots are in charge. At that time, humans will probably be treated in a similar fashion to dogs.“It’s actually going to turn out really good for humans,” he added. “And it will be hundreds of years down the stream before [artificially intelligent beings would] even have the ability.”
So while the great minds of our times have already made peace with the idea that we will be nothing but playthings for the great machines of the future, I am not quite ready to concede all control to software just yet. Anyone who has ever run a algorithm on market data knows that “artificial intelligence” is the biggest oxymoron there is.
At BK we build EA’s all the time. We build news EA’s, we build trend EA’s we build day trading EAs but I am always astounded by the disappointment of some traders who ask -- “What -- I can’t just let it run 24/5?”
No my friend you CAN’T let an EA run 24/5 and expect it to make money. We are not making widgets here. It’s not like brewing beer, or pouring steel or doing some other mindless industrial process that you can duplicate over and over and over again. Trading is like life. Its different every day. It may be SIMILAR but it is NOT THE SAME.
That’s why anyone who thinks that an EA alone will make them money is the biggest fool there is. (Millisecond front running HFT algos that cost hundreds of millions of dollars to install are a different story -- and even they only win 54% of the time)
EA at their best are simply glorified order management systems. Very valuable to be sure, both in their ability to quickly execute trades and in their accuracy of controlling risk. But the ultimate buy and sell decision is always up to you.
In the end trading is the art of reading the market and no robot can do that without some oversight. If they could, then there should be one EA out there that you can just buy off the shelf, plug into your account and then come back a year later to find a pile of profits. When you find one let me know.