Jan 14, 2012

Artificial Intelligence Potential on Trading Systems.


Artificial intelligence (AI) really has a potential when we are seeking to improve the performance of trading systems. The most common applications of AI to trading systems is aimed at optimizing the parameters of a particular strategy. An example is the use of genetic algorithms.

AI algorithms are so called because they have an organization inspired by biological processes. The diversity of algorithms classified as AI is significant and they, effectively, seek to enhance the strategy by optimizations and combinations.

The genetic algorithm, for example, has an ability to explore the solutions more efficiently than traditional methods, avoiding bias on the process of optimizing the system, for not having properly considered the solutions.
There are also algorithms, genetic programming, which have the ability to combine logic, such as blocks, assembling and reassembling a puzzle at a level of complexity above an optimization strategy only.

The AI ​​also has a fascination and power. His argument must be backed by performance improvements. The application must be systematically analyzed and validated properly. Given the peculiarities of each system, it´s necessary to clarify possible sources of inaccuracies.

Rodrigo Sucupira Rodrigo Sucupira
Rodrigo is a Automation and Control Engineer - Escola Politécnica / USP. Interested on Financial Engineering, writes articles about Finance and Technology.
Blog Widget by LinkWithin