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Off-topic >> Social Talk >> is AI the way to go in future?
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Message started by Yury R on 07/14/08 at 15:15:03

Title: is AI the way to go in future?
Post by Yury R on 07/14/08 at 15:15:03

It would be interesting to know people's opinion on this forum.

I can see that algo trading is split into two areas: in one people build complex systems based on some form of artifical intelligence and in another - on simple discrete trading rules/signals.

Does using AI bring any extra performance or extra ... something else? Or is it the only way to go in future?

Doesn't AI hides some dangerous sides of mechanical trading, like risk or data-mining bias?

Title: Re: is AI the way to go in future?
Post by Co0olCat on 07/15/08 at 11:27:22

I am afraid it is the only way to go in the future. The problem is that AI has to compete with the most complex and fast CPU we faced so far – human brain. As a result every AI algorithm is an attempt to replicate intelligence provided by our brains. Since this is not feasible (so far) researcher are trying to use simpler ways of getting intelligence. A good example is a swarm intelligence. Here complex behavior arises from numerous constellations of simple animats’ reactions to environment. I would not be surprised that this is the way of achieving the final goal – AI intelligence comparable to human.

Title: Re: is AI the way to go in future?
Post by Yury R on 07/15/08 at 16:09:59

Penrose's argument denies any possibility of creating AI based on mechanical computations, no matter whether it is centralized or de-...

But why should a humain brain activity be necessarily replicated to build a trading system?

Title: Re: is AI the way to go in future?
Post by Co0olCat on 07/15/08 at 16:23:52

There was a time when people believed that the Earth is flat, a machine heavier than air cannot fly (up 8)...
... any argument against is only an argument. Any failed attempt is not a proof that AI could be build from small "bricks" (simple mechanisms) but only one example of unsuccessful attempt.

As for human brain… we are competing with other people. The day when we will have another opponent would be a turning point to assign new goals :)

Title: Re: is AI the way to go in future?
Post by Yury R on 07/15/08 at 16:33:04

...sounds really scary and apocalyptic... :o :o

Title: Re: is AI the way to go in future?
Post by Max F Dama on 07/18/08 at 04:29:26

I think it sounds great- lifelong vacation for everyone!

Here's one human-brain modeling project that I have been following with interest:
http://www.numenta.com/

And here's an excellent summary presentation by the project's co-founder, Jeff Hawkins:
http://www.ted.com/index.php/talks/jeff_hawkins_on_how_brain_science_will_change_computing.html

Title: Re: is AI the way to go in future?
Post by Co0olCat on 07/18/08 at 08:08:33

I am glad that people are doing research in this direction. In this video I liked the phrase:

The things look complicated until you understand them...

Your honor, I rest my case... 8-)

P.S. Max F Dama, thank you.

Title: Re: is AI the way to go in future?
Post by Co0olCat on 07/18/08 at 08:31:00

I have to correct myself on FIFO optionality (after some hint from the video). Let's call it Fuzzy FIFO (FFIFO). Here it is:
Learning (rule in): First, the system (your brain or trading system, pick your ponny) creates very general idea of a new rule. After several encounters with the same rule the idea gets more and more details. It brunches.
Forgetting (rule out): First, the system erases small details (try to remember events from you childhood), then it slowly removes brunches... until there is only initial general idea.

Now the most interesting part: In reality the system does not erase anything. It removes only hash table. All the knowledge is stored. The moment when old pattern re-emerged it brings old memories back...

The funny thing is that in AI there is a system where you can add FFIFO in no time... do not ask me, you have to come to it yourself :-X

Title: Re: is AI the way to go in future?
Post by Yury R on 07/18/08 at 10:43:25

Quote:

The funny thing is that in AI there is a system where you can add FFIFO in no time... do not ask me, you have to come to it yourself :-X

Very intrigueing but you have just described how to add it - just update the hash array periodically. Although I wouldn't call it "in no time"...

Actually, I thought also in this direction that market changes its mode and mood from time to time and some moods are re-occurring. AI algo can just avoid lengthy re-training with some sort of dejavu functionality. The question only is how to recognise that the new regime resembles something from the past, but that is probably just a technicality.

Title: Re: is AI the way to go in future?
Post by Algo Designer on 07/18/08 at 12:29:07

As one increases the number of degrees of freedom, those "FFIFO" tricks become handy (thanks for the new term, Coolcat!). They help models generalise better and avoid the bad curve fitting. There are numerous ways to add those.

Title: Re: is AI the way to go in future?
Post by Algo Designer on 07/18/08 at 12:57:01

qroach wrote on 07/15/08 at 16:33:04:

...sounds really scary and apocalyptic... :o :o

Sounds very exciting to me! I wish I had more time for this kind of research.

I would not shoot as far as trying to simulate human intelligence though. I think I could get away with much simpler creatures (intelligent agents) that evolve not only their "understanding" of the underlying problem domain (in this forum, financial markets), but also their own topology and cooperation logic.

Humans are... perfect beings. I can only imagine the hardware resources required to come up with any decent model of a human mind. While being a connectionist in my approach to AI, Sir Roger Penrose with his ideas presented in The Emperor's New Mind made me seriously question if human consciousness is fully algorithmic. Or should I say confused me even further! :-)

The thought experiments concerned with Qualia do not help either...

Title: Re: is AI the way to go in future?
Post by Co0olCat on 07/18/08 at 13:04:45

I will try to implement FFIFO and see what it would give. It should take several days.

Title: Re: is AI the way to go in future?
Post by Yury R on 07/18/08 at 13:42:24

Russian speaking members can appreciate this document about AI:

http://arbuz.uz/t_ii.html

Sorry if others feel singled out, but I coudn't resist. I don't know of any translations to English (most likely there aren't any)....

Title: Re: is AI the way to go in future?
Post by Co0olCat on 07/18/08 at 13:51:38

Thank you. :)

First, it is offtopic. Later we will move this part of discussion to "OFF-TOPIC" section of this forum.

Second, for our English speaking members and readers: This is very interesting article written in Russian slang (I have to confess that after I have read it my Russian would never be the same, as well as my way of thinking... :D).

Third, maybe we should create special section: HUMOR for Algo. I have a tailored joke: He is a nice guy, but he is doing Algo ;)

Title: Re: is AI the way to go in future?
Post by Algo Designer on 07/21/08 at 11:15:04

If someone thought that Coolcat sounded somewhat apocalyptic in his remarks, wait until you watch this presentation :-)

http://video.google.com/videoplay?docid=-6464697696665901632&q=%22in+its+image%22

The Creativity Machine(R) featured in the video is described here:
http://www.imagination-engines.com/cm.htm

Comments?

Title: Re: is AI the way to go in future?
Post by Yury R on 07/21/08 at 11:49:39

I guess, the mankind will eventually succeed in mimicking brain activity...

Title: Re: is AI the way to go in future?
Post by Algo Designer on 07/21/08 at 12:03:36

qroach wrote on 07/21/08 at 11:49:39:

I guess, the mankind will eventually succeed in mimicking brain activity...

Who knows, this might have already happened! Consider Nick Bostrom's Simulation argument. :-)

http://www.simulation-argument.com/

Title: Re: is AI the way to go in future?
Post by Yury R on 07/21/08 at 12:47:54

...This is your last chance. After this, there is no turning back. You take the blue pill - the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill - you stay in Wonderland and I show you how deep the rabbit-hole goes...

Title: Re: is AI the way to go in future?
Post by Yury R on 07/21/08 at 12:49:38

interesting links you give, Algo D. Not all of them lead to crasy ideas... :)

Title: Re: is AI the way to go in future?
Post by Algo Designer on 07/21/08 at 14:12:27

qroach wrote on 07/21/08 at 12:47:54:

Entertaining indeed, but The Thirteenth Floor is more elegant conceptually.

Title: Re: is AI the way to go in future?
Post by Yury R on 07/21/08 at 14:12:28

I have skimmed through (the simulation argument) and has found it a rather strange argument. The logic is almost everywhere probabilistic, i.e. "hence" and "therefore" are substituted with "likely" and "almost certainly".

I guess, we need a philosofical corner on this forum for the topic...

Never heard of 13th floor, thanks. I would venture the film "Idiocracy" as mildly relevant movie to problems of AI and I in general...

Title: Re: is AI the way to go in future?
Post by Z on 07/31/08 at 05:59:16

Stupid firewall at work... all the good links are blocked :(

Title: Re: is AI the way to go in future?
Post by Algo Designer on 07/31/08 at 10:12:50

If you are disturbed or excited about the Technological Singularity, you might find this site interesting:

http://www.kurzweilai.net/index.html?flash=1

Title: Re: is AI the way to go in future?
Post by Algo Designer on 07/31/08 at 10:14:20

Z wrote on 07/31/08 at 05:59:16:

Stupid firewall at work... all the good links are blocked :(

Be careful... The boss is watching :-)

Title: Re: is AI the way to go in future?
Post by will on 12/17/08 at 00:32:31

I believe AI is useful. What I am doing is natural computation, such as genetic algorithm, genetic programming, particle swarm optimisation, grammatical evolution, which are very useful for problems of optimisation and modle induction.

Title: Re: is AI the way to go in future?
Post by DerikB on 08/01/09 at 18:59:04

Hi,

My opinion on AI etc.

If you give inputs for your model with predictive capabilty you will be able to predict future price movement (profitable trading system). If your inputs don't have any predictive power you will only do a good curve fitting on past data and it will fail on future data.

I've used a software package called chaoshunter (refer to www.chaoshunter.com). This package will at least help you to realise the importance to find good input for your trading model. Most people waist there time on developing AI software. Rather buy some neural network package and you will realize that usefull inputs are most important.

Just my opinion.

I'm willing to test anything for anyone in chaoshunter. I need open,close price and inputs to be used in a csv file format. This is really excellent software but it will quickly show how difficult it is to show good results on out of sample data.

Regards
Derik