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Will AI Solve Markets? — Jae Chung

jaechung.net · 2,829 words · saved by 1 readers

Can AI-driven trading clearly outperform previous iterations of systematic trading — and who will do it?

I have been grappling with this question for quite a while. It’s become more of a hot topic recently. Every week, I hear of a new “neotrading lab” that is looking to solve markets using AI, some funded by YC. Will AI solve markets? If so, who? Let’s first define the question with a quick thought experiment. If markets are completely, 100% solved, then markets should be perfectly efficient. Price should become a pure reflection of all information. In any timeframe (t), expected price at t+1 should be a function of current price plus the risk-free rate and some risk premium. Simply put,…

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