I sure don't have any money to invest at the moment being a broke
MBA graduate student (we can all relate) but when I start getting some ROI
from this degree, my first big investment might just be on AI!
Computerized algorithms are quickly
replacing single-stock analysts and investors, making it a little bit easier for
speculators with money to make investing decisions.
As with all things ruled by Algorithm, AI is gradually gaining in
popularity with an increasing number of financial institutions (30% trade volume on NYSE) using algorithm-based trading models.
For the techies interested in knowing how this works; Generic algorithms are the most commonly used, these are problem solving methods
(heuristics) that utilize the concepts of natural selection to determine the
best solution to a problem.
GAs are created mathematically using vectors, and parameters for
each trading rule are represented with a one-directional vector that can be
thought of as a chromosome in genetic terms and the values used in each parameter
can be thought of as genes; the Darwin theory of natural selection then kicks
in! (Biologists can relate with this process!)
Parameters used include Moving Average Convergence-Divergence,
Exponential Moving Average and Stochastics and different values can be
established to decide when to trade stocks to grow investment portfolio.
I have my eyes firmly fixed on new developments in this field and
I hope the algorithm can be compressed into a mobile app in the nearest future
so I can set parameters for trading backed by confidence in the almighty AI.
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