Will the Financial Market Eventually Be Replaced by AI?

We never doubt the capabilities of AI. In fact, we are amazed by it every day over the past few years. But when it comes to the financial market, we do not believe it will be completely replaced by AI. Why?

1. The Financial Market is a Self-Fulfilling Prophecy Market

The trend of the financial market is driven by capital. If your capital is large enough, or your influence is strong enough, the market trend is actually in your thoughts and actions. AI cannot predict your thoughts. Simply put, you can even release a prophecy in advance, and the market might follow your prophecy, which has nothing to do with AI.

For example, many times the market trend depends on the speeches of Federal Reserve Chairman Powell. No matter how AI predicts beforehand, Powell has the full ability to make the market trend opposite to AI’s prediction (although he might not do so). That is to say, AI can never replace human influence in this aspect.

2. The Market Has Reflexivity

Simply put, if you predict correctly and make money, you will want to take profits. Even if you do not want to take profits, others will think of taking profits, and your action of taking profits will inevitably lead to a market decline. Therefore, no matter how smart AI is, once it guesses correctly, it might bring a scenario of a sharp drop next.

3. Game Nature

Those who really make big money in the market do not rely on predicting directions to make money. They profit through high-frequency trading or market making. In short, they make money by setting rules because they have enough capital, fast enough speed, and can obtain licenses. If AI completely dominates the market, who will lose?

This cannot happen. The final result must be that some AIs lose their magic because they rely on data to make decisions. At that time, some data changes will definitely occur, making some AIs lose their decision-making ability.

In short, the market has reflexivity, self-fulfilling prophecy, and game characteristics. Even the smartest AI cannot completely dominate the market.

But one thing is undeniable: all market participants have to rely on AI for decision-making, at least to improve decision-making efficiency. In fact, this phenomenon has always been happening in the financial modeling industry, except that they did not use large models at the beginning, but technologies like machine learning.

But the emergence of models has not changed the essence of finance. In fact, the emergence of the computer industry and even the research of artificial intelligence were originally serving the financial field. The financial field has always been the earliest to use AI.

Conclusion

Do not worry about AI replacing traders, nor worry that all the money in the market will be earned by AI giants, but should embrace AI, such as using our dashpull :>