4 ms·

The nuances of the game are different from strictly trying to predict the future. Casinos don't try to predict the future of every spin of the wheel or roll of

by peller 10y ago

The nuances of the game are different from strictly trying to predict the future. Casinos don't try to predict the future of every spin of the wheel or roll of the dice. Every individual game is random. But over a large enough sample size (number of games played), the odds are not random. The same principle is at play in trading the markets, except the "odds" are determined by the traders' skill - their "edge." Which is roughly some combination of access to the right people, access to better information (where better might but not necessarily mean quicker), and experience (gut feelings, hunches, what-have-you). So the real question is, can machine learning algorithms develop an "edge", and if so, can they stay solvent long enough to do so.

dilemma 10y ago
No. In casinos the games are designed so that in the long run the house always wins. They don't need to care about odds. The stock market isn't a game; it isn't designed and it continuously evolves.
- peller 10y ago
  > In casinos the games are designed so that in the long run the house always wins. That's exactly what I meant by odds; they always win because the odds of the games are in their favor. > The stock market isn't a game It's a game in the same sense that life itself is a game. > it isn't designed The mechanisms that fit all the pieces together are very much designed by humans. True the behavior of the market isn't designed; it's an emergent property of the complex system we call "the markets." > it continuously evolves Yes, but change is also the constant. What underlies that change is supply and demand. Of course you're free to disagree. But if you'd like to learn more about the not-100%-accurate analogy I described in abbreviated form, the source is here: http://www.goodreads.com/book/show/253516.Trading_in_the_Zone http://www.goodreads.com/book/show/253516.Trading_in_the_Zon... Edit: Good reading on "life as a game": http://www.goodreads.com/book/show/189989.Finite_and_Infinite_Games http://www.goodreads.com/book/show/189989.Finite_and_Infinit...
  - dilemma 10y ago
    >It's a game in the same sense that life itself is a game. Life isn't a game.

by peller 10y ago

dilemma 10y ago

No. In casinos the games are designed so that in the long run the house always wins. They don't need to care about odds. The stock market isn't a game; it isn't designed and it continuously evolves.

peller 10y ago
> In casinos the games are designed so that in the long run the house always wins. That's exactly what I meant by odds; they always win because the odds of the games are in their favor. > The stock market isn't a game It's a game in the same sense that life itself is a game. > it isn't designed The mechanisms that fit all the pieces together are very much designed by humans. True the behavior of the market isn't designed; it's an emergent property of the complex system we call "the markets." > it continuously evolves Yes, but change is also the constant. What underlies that change is supply and demand. Of course you're free to disagree. But if you'd like to learn more about the not-100%-accurate analogy I described in abbreviated form, the source is here: http://www.goodreads.com/book/show/253516.Trading_in_the_Zone http://www.goodreads.com/book/show/253516.Trading_in_the_Zon... Edit: Good reading on "life as a game": http://www.goodreads.com/book/show/189989.Finite_and_Infinite_Games http://www.goodreads.com/book/show/189989.Finite_and_Infinit...
- dilemma 10y ago
  >It's a game in the same sense that life itself is a game. Life isn't a game.