BO90: Can AI Trading Models Really Work?

Top Traders Unplugged

Niels Kaastrup-Larsen

Business, Business News, Investing, News

4.8 • 670 Ratings

🗓️ 2 June 2020

⏱️ 5 minutes

🔗️ Recording | iTunes | RSS

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Summary

Thoughts on AI trading systems, and how they handled the crash of 2020.

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Transcript

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0:00.0	One thing actually that I wanted your opinion about before, I'm sure Moritz might ask you a few more questions, is just the whole concept of AI.
0:14.3	I mean, I'm super curious to see how AI models have conned through the last two weeks because this is data that those bottles
0:22.2	probably wouldn't have seen before.
0:26.1	Do you have a view on AI?
0:28.4	Do you like it?
0:29.5	Do you hate it?
0:31.5	Neutral?
0:32.7	I mean, I think it's fairly well known that I'm not a big fan of AI.
0:37.1	And I kind of put my cards on the table and say, partly that's down to ignorance.
0:42.3	It's not a space that I understand that well.
0:45.3	It's also partly down to the bias of having seen people use these more complicated techniques,
0:52.3	the things like AI machine learning neural networks,
0:55.0	judging algorithms.
0:56.0	I've seen a lot of people do some very kind of massive degree of overfitting using these techniques.
1:02.0	And I think the real danger is that there are people, most of the people I've seen using them
1:07.0	do not have a good kind of robust background in sort of classical statistics that underlies them.
1:13.6	And they don't really have a good intuitive understanding about robustness and overfitting.
1:19.6	And so they use these models and it's like giving a three-year-old, you know, a nuclear weapon.
1:25.6	You know, it's just dangerous. Now there are people in the
1:29.7	space who really know what they're doing and are using AI very intelligently. But, you know,
1:37.4	you go and speak to these guys and it's obvious that it's a fiercely complicated business. And,
1:43.5	you know, the kind of person off the street who's downloaded some kind of open source, you know,
	...

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