4 ms·
Alpha is ultimately the result of analysis, of better analysis than others. LLM's can actually be exceptionally good at research and pattern recognition, i.e.
by crazygringo 5mo ago
Alpha is ultimately the result of analysis, of better analysis than others.
LLM's can actually be exceptionally good at research and pattern recognition, i.e. analysis. And while they aren't great at running numbers themselves, they can do exceptional work passing off Python scripts to an interpreter to generate the numerical results they need.
I'm quite sure the Robinhood AI is going to be trash, i.e. just a gimmick.
But, it's not crazy to think that with the right harness, there are big opportunities for identifying profitable strategies. Especially relying on unparalleled and essentially unlimited research capacity based on public information. More analysis than any single firm could ever hire.
And even for Robinhood users, it's entirely plausible that AI-traded stocks will perform much better than the trades a majority of users would make, since most investors are really unsophisticated.
- ai_fry_ur_brain 5mo ago>LLM's can actually be exceptionally good at research and pattern recognition, i.e. analysis. No they aren't, they're good at imitating analysis based on representations of analysis in their training data. Also, Its likely that out dated techniques would over represented in training data. Do you think Jane Street would have the returns they do if they just imitated all their competitors and everyone was using the same strategies?
- ai_fry_ur_brain 5mo ago[flagged]
- Esophagus4 5mo agoThere is a beautiful irony in being condescending about AI simply imitating training data… by repeating a meme you saw on Twitter: https://www.facebook.com/photo/?fbid=772349875124360 https://www.facebook.com/photo/?fbid=772349875124360 (which I guess I will call your training data ;) )
- amanaplanacanal 5mo agoThe difference is that a human can evaluate the meme against their real world history and experience, and make a judgement.
- jeremysalwen 5mo agoThat sounds like more training data that the human is just regurgitating. Nobody I know has ever had an original thought, just combined existing thoughts that were in their training data, in new combinations.
- ai_fry_ur_brain 5mo agoThats a sad way to perceive the human experience and the individual. Its lowkey a techno fascist psyop you're falling for if you believe this to be true.
- deleted 5mo ago[deleted]
- ai_fry_ur_brain 5mo agoIts a common phrase. Ive never used facebook.
- thunky 5mo agoYou're helping their point.
- mbesto 5mo agoThis is essentially what AlphaZero is doing: https://nof1.ai/ https://nof1.ai/
- Karrot_Kream 5mo agoHeh if you look at the Sharpe Ratios of the strategies/models, they're all terrible. The best performing regime there is still a Sharpe of 0.019
- infecto 4mo agoYeah it looks like what uneducated retail traders would find interesting.
- thisisit 5mo ago> LLM's can actually be exceptionally good at research and pattern recognition, i.e. analysis. Sure but knowing where to start research is also a problem. Just saying “do research” isn’t going to work even with volumes of public information.
- infecto 4mo agoWell said. Lots miss this key point and it’s what I mean by alpha. Where to start, what the angle is, and LLM can help develop though I would of course argue it’s a fools errand with how crowded the space is but you could still develop an idea but it’s not going to create the idea for you.
- VanTheBrand 4mo agoYeah if you have an actual really good idea for a certain kind of under analyzed data that could give you an edge but it would take too much effort or time to compile or analyze the data, an LLM has potential to make a viable strategy out of an otherwise correct but unuseful insight
- infecto 4mo agoI mean sure an LLM can indeed have useful ML functions BUT it is a fools errand to think an LLM at the retail level is generating any alpha. Help build a model sure. Whatever these weird mechanism of agents trading, no.