Silicon Valley Hedge Fund Takes on Wall Street with AI Trader

#1

Post by bunburying » Tue, Feb 07, 2017, 12:08 PM UTC

Silicon Valley Hedge Fund Takes on Wall Street with AI Trader
bloomberg.com

Re: Silicon Valley Hedge Fund Takes on Wall Street with AI Trader

#2

Post by JTon » Tue, Feb 07, 2017, 1:44 PM UTC

This is the most interesting bit for me:

>Sentient's system is inspired by evolution. According to patents, Sentient has thousands of machines running simultaneously around the world, algorithmically creating what are essentially trillions of virtual traders that it calls "genes." These genes are tested by giving them hypothetical sums of money to trade in simulated situations created from historical data. The genes that are unsuccessful die off, while those that make money are spliced together with others to create the next generation. Thanks to increases in computing power, Sentient can squeeze 1,800 simulated trading days into a few minutes

Re: Silicon Valley Hedge Fund Takes on Wall Street with AI Trader

#3

Post by alva » Tue, Feb 07, 2017, 1:58 PM UTC

JTon wrote: post #2

This is the most interesting bit for me: >Sentient's system is inspired by evolution. According to patents, Sentient has thousands of machines running simultaneously around the world, algorithmically creating what are essentially trillions of virtual traders that it calls "genes." These genes are tested by giving them hypothetical sums of money to trade in simulated situations created from historical data. The genes…

This is the most interesting bit for me :

> It shares little about the data used for the AI's decision-making and isn't profitable

Re: Silicon Valley Hedge Fund Takes on Wall Street with AI Trader

#4

Post by rayuela » Tue, Feb 07, 2017, 1:59 PM UTC

alva wrote: post #3

JTon wrote: post #2

This is the most interesting bit for me: >Sentient's system is inspired by evolution. According to patents, Sentient has thousands of machines running simultaneously around the world, algorithmically creating what are essentially trillions of virtual traders that it calls "genes." These genes are tested by giving them hypothetical sums of money to trade in simulated situations created from historical data. The genes…

This is the most interesting bit for me : > It shares little about the data used for the AI's decision-making and isn't profitable

Yup. This is a bullshit PR piece.

Re: Silicon Valley Hedge Fund Takes on Wall Street with AI Trader

#5

Post by rbinv » Tue, Feb 07, 2017, 2:02 PM UTC

JTon wrote: post #2

This is the most interesting bit for me: >Sentient's system is inspired by evolution. According to patents, Sentient has thousands of machines running simultaneously around the world, algorithmically creating what are essentially trillions of virtual traders that it calls "genes." These genes are tested by giving them hypothetical sums of money to trade in simulated situations created from historical data. The genes…

So, genetic algorithms? Good luck with that.

Re: Silicon Valley Hedge Fund Takes on Wall Street with AI Trader

#6

Post by sixtypoundhound » Tue, Feb 07, 2017, 2:04 PM UTC

rbinv wrote: post #5

JTon wrote: post #2

This is the most interesting bit for me: >Sentient's system is inspired by evolution. According to patents, Sentient has thousands of machines running simultaneously around the world, algorithmically creating what are essentially trillions of virtual traders that it calls "genes." These genes are tested by giving them hypothetical sums of money to trade in simulated situations created from historical data. The genes…

So, genetic algorithms? Good luck with that.

I recall reading an early article about using genetic algorithms for stock trading in the early 90's. This isn't really that new....

Re: Silicon Valley Hedge Fund Takes on Wall Street with AI Trader

#7

Post by vijucat » Tue, Feb 07, 2017, 2:07 PM UTC

rbinv wrote: post #5

JTon wrote: post #2

This is the most interesting bit for me: >Sentient's system is inspired by evolution. According to patents, Sentient has thousands of machines running simultaneously around the world, algorithmically creating what are essentially trillions of virtual traders that it calls "genes." These genes are tested by giving them hypothetical sums of money to trade in simulated situations created from historical data. The genes…

So, genetic algorithms? Good luck with that.

Genetic Programming, rather. See the papers authored by their Co-founder and Chief Scientist:

https://scholar.google.com.hk/scholar?q=Babak+Hodjat+genetic...

Re: Silicon Valley Hedge Fund Takes on Wall Street with AI Trader

#8

Post by growt » Tue, Feb 07, 2017, 2:13 PM UTC

I just started reading 0 to 1 and I think according to Peter Thiel this news sums up everything that is wrong with the world in one sentence :)

Re: Silicon Valley Hedge Fund Takes on Wall Street with AI Trader

#9

Post by pdog » Tue, Feb 07, 2017, 2:13 PM UTC

> Thanks to increases in computing power, Sentient can squeeze 1,800 simulated trading days into a few minutes.

How is it possible to generate seven years of convincing sample data from historical trading data without overfitting your models?

Re: Silicon Valley Hedge Fund Takes on Wall Street with AI Trader

#10

Post by problems » Tue, Feb 07, 2017, 2:16 PM UTC

pdog wrote: post #9

> Thanks to increases in computing power, Sentient can squeeze 1,800 simulated trading days into a few minutes. How is it possible to generate seven years of convincing sample data from historical trading data without overfitting your models?

Probably by testing against other data to make sure you're not overfit. Though it looks like they're not profitable currently, so... maybe they just don't.