Algorithmic trading is about one deterministic set of instructions, a unique recipe. The problem with recipe is that it doesn’t adapt to changes, it’s based on the assumption that what happened in the past will repeat itself very similarly. But repetition is not the rule with financial markets.
Aidvisors (a.k.a. Artificially Intelligent Advisors) are based on ensemble learning and evolutionary optimization. In other words, Aidvisors are a mix of many recipes (instead of one unique recipe) and the recipes are continuously improving (instead of one deterministic recipe).
Aidvisors are big ensembles of trading algorithms that are continuously adapted to the changing market cycles. For instance, with the machine learning pipeline called Genesis Risk Management, hundreds of thousands of trading algorithms are optimized on a daily basis, and they are optimized using thousands of predictors, such as neural nets, that are trained on a monthly basis. And those figures are just the minimal figures.
The main reason to use advanced machine learning models is because financial markets are stochastic and heteroskedastic, which means that they are nearly random. Without adapting to changes it won’t manage the risk correctly and won’t stand a chance to outperform the market in the long-term.
As a French statesman once said: “The great recipe for success is to work, and always work.” Our solution is to put AI at work to manage financial risk. Our recipe is not a single trading algorithm. Our recipe is a whole AI system doing intensive work to boost numerous trading algorithms every single day.