Recently Financial Times wrote an article “Self-driving finance could turn into a runaway train”. According to some estimates, only 10% of transactions on the US equity market are done by the humans.
Big institutions seems to be perfectly happy to let their machine learning algos to trade on their behalf. Some suspect that robots have caused the flash-charshes in the recent years. This is not too far-fetched since artificial intelligence is after all fancy statistics. No matter how elegantly designed filter and feedback loops are in place, trading decision are based on the past data that robots use for learning from the market.
There is a dilemma – robots are learning from each other. So equity market has become a laboratory for competing learning systems that compete with each other. What is the role of humans in the decision process? Should we develop a home robot for trading?