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Deep Learning Can Read The Tea Leaves In Market Data

International Business Times

Henri Waelbroeck, director of research at machine learning trade execution system Portware, says rather poetically that the system "reads the tea leaves" in market data to distinguish different sorts of orders and execute trades more efficiently. Portware uses artificial intelligence to help traders select the best algorithm for particular market conditions, asset class, broker, venue etc., interacting with the order flow and computing a mind-boggling array of variables in real time. Say you are buying a stock, and you predict there is likely to be more orders hitting the bid side of the spread in the next five minutes, you should be able to operate an efficient algorithm that only posts limit orders and collects the spread as it executes. Using an algorithm that crosses the spread in this instance would be wasteful since you expect order flow to be coming your way. Waelbroeck, formerly a professor at the Institute of Nuclear Sciences at the National University of Mexico, whose specialisms include genetic algorithms and chaos theory, said: "Just throwing machine learning at problems usually doesn't give a very good answer.


Deep learning can read the tea leaves in market data

#artificialintelligence

Henri Waelbroeck, director of research at machine learning trade execution system Portware, says rather poetically that the system "reads the tea leaves" in market data to distinguish different sorts of orders and execute trades more efficiently. Portware uses artificial intelligence to help traders select the best algorithm for particular market conditions, asset class, broker, venue etc., interacting with the order flow and computing a mind-boggling array of variables in real time. Say you are buying a stock, and you predict there is likely to be more orders hitting the bid side of the spread in the next five minutes, you should be able to operate an efficient algorithm that only posts limit orders and collects the spread as it executes. Using an algorithm that crosses the spread in this instance would be wasteful since you expect order flow to be coming your way. Waelbroeck, formerly a professor at the Institute of Nuclear Sciences at the National University of Mexico, whose specialisms include genetic algorithms and chaos theory, said: "Just throwing machine learning at problems usually doesn't give a very good answer.


Artificial Intelligence: Robo Rules & Regulation

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Artificial intelligence has dominated headlines recently, highlighting the best and worst of its capabilities and suggesting there is still work to be done and improvements to be made. News of Microsoft's Tay, an artificially intelligent bot which was created to mimic the personality of a 19-year old woman, quickly turned sour as it seemed to transform into a'bitter racist' on the social media website twitter. When Microsoft was asked to confirm whether the bot had been shut down, it responded: "The AI chatbot Tay is a machine learning project, designed for human engagement. "As it learns, some of its responses are inappropriate and indicative of the types of interactions some people are having with it. A more successful venture into AI was seen in Google's AlphaGo artificial intelligence after it defeated Go world champion Lee Se-dol twice.


The Evolving Trading Desk: from Humans to Machines to AI-Assisted Humans Finance Magnates

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This article was written By Henri Waelbroeck, Head of Research at Portware. Execution management has matured from laying the foundation for electronification by automating repetitive workflows to extracting progressively more value from the infrastructure as it evolves. Each generation in execution management technology has pushed automation one level higher in the decision hierarchy. The FM London Summit is almost here. Today, we are seeing the dawning of the next generation of execution management systems: one where AI works with the trader to combine the best of quantitative optimization (at speed and at scale) and the trader's domain knowledge.


How to predict the future?

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The future – how it will be? Here are the best strategies if you want to succeed in looking into it. You can best predict the future after reading the below article. Looking into the future is difficult. But with predictive analysis based on historical data combined with analytical tools we can predict the future.