We have been closely watching the Crypto Currency forex market if you can refer to it as that, because of the fake data, fraud, and related problems. One thing stands apart – it is not so unique of FX, commodities, futures, or stocks. Market dynamics are market dynamics. And since several readers with this fine site will know – the majority of traders lose. There’s been analysis done with this, we all know how this ends. A few early investors make a bundle and thousands or millions even are left holding the bag. From one perspective, a bubble is similar to a ponzi scheme. In MLM, there are many who amass wealth – the founders.
If you’re not the founder – how can you tell which Crypto will probably be the subsequent Bitcoin? You really don’t. You have no idea. You can visit Korea and do all of the due diligence you want, the fact is that there is no-one to understand the future as well as a top analyst might be wrong at times.
Quant traders have similar doctrine each will share – they are smart enough to learn how stupid they may be. They know their unique flaws and so they post to a better power- that is certainly Artificial Intelligence.
Computing power has become so massive that it must be likely that everyone can from other own home office create an intelligent software system that does well. Obviously, much like the laws of market dynamics, you can even produce a robot which is worth exactly zero – a huge pile of crap. When a quant makes an algorithm it’s either priceless or worthless. If it works, he has effectively designed a profitable machine. If it doesn’t work, there is absolutely no value to anyone even if it’s just academics.
How do we understand what method works, how to construct a working bot or buy one? There are obvious conflicts of great interest in people who sell bots. The internet has become covered with good marketeers, while profitable quants mostly maintain their ways to themselves. Selling a product or service, and trading a robot, can be extremely 2 different skills.
Crypto thus far has proven similar to most markets: impossible to trade.
Even though many are kicking themselves because of buying and holding, I can tell you being a trader and i also speak for a lot of inside the room there’s not a way I might also have the patience to sit with a hugely profitable position for several years even though the price goes parabolic.
That is why quants develop and trade algorithms – picking entries and exits can prove to be brain-destroying. There are dangers and risks with robots too needless to say, however they are of an different nature.
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