Will AI mean the end of the technical trader?

[i4value]

If you are a technical trader, you are effectively buying stocks that the crowd is chasing. Your charts, trendlines, candlesticks, etc are tools to help you gauge market sentiments.

I would think that AI would eventually reach a stage that it does a better job than human as it can not only process faster but can assimilate more information than human.

The essence of technical analysis is reading market sentiments. In this context there are other ways to gauge market sentiments than just using price and volume data. AI can analyze news articles, social media posts, and other sources of information to gauge market sentiment. This sentiment analysis can be used in conjunction with the traditional technical analysis to make trading decisions.

Then when it comes to risk management AI can assess and manage risk more effectively by continuously monitoring and adjusting investment portfolios based on changing market conditions.

So, I am postulating a future where AI can do a better job with technical than humans. When the AI can do better than humans, then it will be a case of one AI vs another.

I am not sure whether all the AI would come to the same conclusion. But imagine that if no human can beat the AI in reading crowd behaviour, then all will rely on the AI. But everyone will use the same AI (unless there are ways to differentiate the AI).
It would then be a level playing field. If nobody can get an advantage from trading, it would be dying field.

Is this in the realm of science fiction?

I think it is more likely for the AI to beat human technical investors and the long-term fundamental investors.

Afterall fundamental investing is about looking at company performance and prospects. If the AI is better than human in this, they would be running companies. Terminator world.

My point is that all technical investor should start learning fundamental investing as you are likely to go the way of the travel agent. Visit i4value.asia as the way to start.

[LionFlyer]

In very basic forms, they are already here in the form of roboadvisors/robotrading for the general public on a portfolio level and algo trading for professionals.

Individual stock picking / trading for the public, seems a matter of when. Would it mean they are better than the average investor? It is an interesting question, since it touches on human behavior, which leads to some market inefficiencies (hence traders can exploit).

If there are more AI based trading compared to human, I wonder what would mean for market efficiency.

[weijian]

My point is that all technical investor should start learning fundamental investing as you are likely to go the way of the travel agent. Visit i4value.asia as the way to start.

hi i4value,

There are not a lot of "technical investors" here because such discussions are not encouraged in the first place. As a matter of fact, we moderators clamp down on such "technicals" discussion. As such, you are probably preaching to the converted here.

Take note that your last sentence is pretty blatant advertising your blog. Your blog has great value but the point is that there is another section to do advertisements (under "Advertise here").

Moderator