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is AI the way to go in future? (Read 27356 times)
qroach
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is AI the way to go in future?
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?
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Co0olCat
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Re: is AI the way to go in future?
Reply #1 - 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.
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qroach
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Re: is AI the way to go in future?
Reply #2 - 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?
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Re: is AI the way to go in future?
Reply #3 - 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   Smiley
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qroach
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Re: is AI the way to go in future?
Reply #4 - 07/15/08 at 16:33:04
 
...sounds really scary and apocalyptic... Shocked Shocked
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Re: is AI the way to go in future?
Reply #5 - 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...
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Re: is AI the way to go in future?
Reply #6 - 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...   Cool

P.S. Max F Dama, thank you.
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Re: is AI the way to go in future?
Reply #7 - 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   Lips Sealed
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qroach
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Re: is AI the way to go in future?
Reply #8 - 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   Lips Sealed


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.
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« Last Edit: 07/18/08 at 13:18:13 by qroach »  
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Re: is AI the way to go in future?
Reply #9 - 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.
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Re: is AI the way to go in future?
Reply #10 - 07/18/08 at 12:57:01
 
qroach wrote on 07/15/08 at 16:33:04:
...sounds really scary and apocalyptic... Shocked Shocked


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! Smiley

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




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Re: is AI the way to go in future?
Reply #11 - 07/18/08 at 13:04:45
 
I will try to implement FFIFO and see what it would give. It should take several days.
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qroach
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Re: is AI the way to go in future?
Reply #12 - 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)....
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Re: is AI the way to go in future?
Reply #13 - 07/18/08 at 13:51:38
 
Thank you.   Smiley

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... Cheesy).

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   Wink
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Re: is AI the way to go in future?
Reply #14 - 07/21/08 at 11:15:04
 
If someone thought that Coolcat sounded somewhat apocalyptic in his remarks, wait until you watch this presentation Smiley

http://video.google.com/videoplay?docid=-6464697696665901632&q=%22in+its+image%2...

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

Comments?
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