i bet you some do!

Except exactly nobody calls those "AI".... So no

Ma! I need you to withdraw your retirement fund.

Yup. Machine learning is great. Using a predictive text keyboard with a large training set for EVERYTHING is not great.

I would trust AI to beat money managers in the stock market because it was proved a chimp throwing darts beats experienced money managers.

Driving trains requires skill.

Even then, and as I wrote in another post, a custom trading NN might be working a strategy which is fine under normal market conditions whilst leading to massive losses if those conditions change (i.e. "picking nickels in front of a steamroller") and because of the black-box nature of how Neural Networks work and their tendency to end up with the outputs being very convoluted derivations of the inputs (I expect even more so in Markets, were the obvious strategies that humans can easilly spot have long been arbitraged away, so any patterns such an NN spots during training will be so convoluted as to not be detectable by most humans), nobody will spot the risky nature of that strategy until getting splattered.

Neural Networks working in predicting market movements are, unlike a predictive text keyboard or even an automated train driver, not operating in a straightforward mainly non-adversarial enviroment.

... you know that goldfish, randomly swimming to one side or another of a fish tank...

... you know they perform better at picking stocks that will go up or down in the next quarter than nearly all professional hedge fund managers, right?

In fact, this old expiriment was rerun fairly recently... ironically, with an AI being used to simulate a goldfish, in a scenario similar to that old study from some decades back.

https://www.reddit.com/r/wallstreetbets/comments/tts0a4/some_theories_on_how_the_goldfish_was_able_to/

The goldfish outperformed both WSB... and the Nasdaq.

I am literally not even joking when I tell you that a goldfish will probably outperform an AI at at least fairly short term stock picking.

See, there is a fundamental problem to predicting the market.

You have to have a strategy by which you do this.

If you employ this strategy... people will reverse engineer it and figure out how it works.

Then, everyone does that strategy.

Then, the strategy does not work any more, 'nonsense' begins to happen.

If you are curious about the mechanics that cover that whole, meta sort of process, look into game theory under conditions of imperfect information and information assymetry.

Its... basically a robust mathematical approach to simulating the flux of 'animal spirits' within a market... or in modern vernacular, 'vibes'.

I still wouldn't, because the stock market is already full of algorithmic trading and so you'd have to believe yours was better than the big boys out there.

LLMs can help with trading. As an example, if you can read news articles 1000x faster than a human, then you can make appropriate market decisions that much faster and make profit off that. These need not be very intelligent market decisions. Any idiot and every LLM knows perfectly well what stocks to buy or sell when there is an announcement for tariff on product xyz.

In case you didn't know, DeepSeek was made by a trading company.

No you would not, because you can do that at any time

true; could only get "AI" to do useful stuff when i gave it specialized knowledge on the topic i wanted it to help me with; if i asked outside this given scope information would go to shit tho.

Oh. Oh no...

Wonder how they lost anything in the first place...

I hate that ai just means llm now. ML can actually be useful to make predictions based on past trends. And it's not nearly as power hungry

No one who does not wear their pants on their head uses an LLM to make trades

LMMs are better than other methods at context and nuance for sentiment analysis. They can legitimately form part of trade generation.

Eh... Wdym. The algos that trade fight in the micro second level. They adapt to each other and never stop changing. It's exactly the same problem. Do you think llm is a unique neural net ? They all work the same. When you try to sound like ml is not the same as llm or as if ml is neural nets you don't help anyone understand any of those concepts because you don't yourself

they dont need AI to lose 99%

My understanding is that HFTs - which are highly profitable - likely use some AI-techniques.

From my understanding of HFT, what they're effectively doing is automated front runnings.

They scan market activity and look for spreads between orders and availability. Then they place very short term orders any time they see, for instance, "I'll sell 1000 X at $49" and "I'll buy 500 X at $49.05", effectively buying up all the outstanding $49 orders and flipping them for a $.05 profit.

You don't need an advanced AI for this. You just need to be able to see orders and make trades faster than anyone else in the market.

Because getting out ahead of trade volume is so lucrative, you'll see huge investments in rack space near the physical stock exchanges and high speed lines between cities with big brokerages.

But AI trading is (theoretically) about spotting and predicting long term trends in the market, not front running active trades.

That's the problem with our modern errosion of terminology. The term AI stopped meaning anything some time ago. Machine learning algorithms that are useful in this operations are nothing new, but have basically nothing in common with whatever people mean when they use the word AI nowadays

HFTs initially existed before AI, they were triggered by what we would now call basically complex, but 'dumb' condition sets.

Imagine a cluster fuck nightmare of nested conditonal IF THEN ELSEIF type shit.

They only work because the bigboy trading firms literally have lower latency, lower ping to the actual stock market servers themselves, than anyone else, because they pay for it.

This allows them to do a whole bunch of what should probably be illegal shit, such as effectivelt slightly changing the price someone else is going to buy or sell at, in between the time they click 'execute trade' and the time the trade actually executes.

Apply leverage into that kind of pseudo sort of arbitrage as you are comfortable with, and may the speediest fiber line win!

This would be one of the few topics I'd suggest you look at ZeroHedge for, they had actually very robust technical coverage of the Flash Crash back around the GFC.

That was basicslly caused by some of these dumb HFT algos amplifying each other, untill they started breaking things, because they were not coded very well.

They apparently did not realize they were basically making extremely complex PID controllers, that they were making things that, when a bunch of them existed in the same market, would basically cause cascade and crash effects, feedback.

Cry for help, it was trying to get you to interface with its own API, to either fix it, or end it.

I've actually used chat GPT (or was it Cursor? I dont remember now) to help write a script for a program with a very (to me, a non-programmer) convoluted, but decently well documented API.

it only got a few things right, but the key was that it got enough right for me to go and fix the rest. this was for a task I'd been trying to do every now and then for a few years. was nice to finally have it done.

but damn, does "AI" ever suck at writing the code I want it to. or maybe I just suck at giving prompts. idk. one of my bosses uses it quite a bit to program stuff, and he claims to be quite successful with it. however, I know that he barely validates the result before claiming success, so... "look at this output!" — "okay, but do those numbers mean anything?" — "idk, but look at it! it's gotta be close!"

Not my meme, but I have read stories of multiple people trying this and failing spectacularly. It wouldn't surprise me if this actually happened.