[We are just beginning to see the many developing applications of artificial intelligence (AI) in the money management process. The Institute for Innovation Development has covered a number asset management pioneers previously and today, to further expand our coverage, we have a guest contributor. Institute member, Bob Mann, CEO of Advisor’s Capital Investments in Woodstock, Conn., who was so excited and impressed with his discovery of Trade-Ideas, LLC that he wanted to tell their story. Know that Bob is an author and expert on market cycles and a veteran market technician who for five decades has been holding out a lantern in search of honest and reliable money management and trading systems. So when he finds a system, in this case AI based, I am only glad to help him share his discovery with all of us.]
How You Can Use AI To Profit In Volatile Markets — Computer Based Chess Masters And AI Trading Systems
by Robert Mann, CEO, Advisors Capital Investments
• IBM’s Deep Blue Computer beat Gary Gasparov to defeat a reigning chess champion in 1996 for the first time ever.
• December 30, 2014 – A new computer chess champion called KOMADO proved it can beat any human being playing chess.
• December 17, 2017, Alpha Zero – Google – Deepmind – AI beats the world’s best computer program at chess.
• May 10, 2018 Gary Gasparov says “Don’t Try to Beat AI… Merge With It.”
Is it any wonder that today’s powerful AI systems can beat any human being at investing?
Renaissance Medallion Fund has proven so successful using AI that it doesn’t want client funds. You cannot have access to the Medallion Fund’s Technology but you can have access to Trade-Ideas, LLC and their AI system called “Holly”. Holly is the only commercially available AI service that has delivered positive alpha over the past three years. Trade-Ideas has recently been awarded Best Machine Learning Development at FundIntelligence’s 2019 Technology and WSL Awards. This was mostly due to the proven application of the technology to substantially outperform the S&P in 2018.
Holly is an artificial intelligence tool that generates active strategies each day to capture alpha. Different modes of application are available: Risk-on performance reflects a bias towards staying in the positions beyond reward targets while strictly adhering to risk targets for each trade. Risk-off mode is where reward actions do not deviate from trade plan parameters and risk management rules permitting exits earlier if existing profits erode significantly. Risk-on mode carries all trades the entire day until the close and is often present during days of momentum, which typify the majority of trading days in 2018. Some 2018 Risk-On performance metrics follow: