this post was submitted on 17 Nov 2025
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It's true that NNs are strong at spotting patterns in masses of data, but trading is a particularly hard problem for this kind of task because the market constantly adapts to its participants. If other traders have found a pattern, it will already be priced in when you try to make money off it, and your strategy will fail. And since trading is a worldwide competition with billions of dollars to be won, you are naturally competing against teams of the best of the best who are willing to put massive resources into their algorithm development, computing, and data acquisition. Therefore the chances for someone like us to find an algorithm that systematically beats them is very low.
So for any young math/CS nerd who comes across this thread and wants to try their luck, be aware of the difficulty before you invest any real money, and learn about the merits of passive investing.
Yeah, thanks for pointing that out.
I kind approached it in another post I made here about this when I mentioned that "all the human perceived patterns have already been spotted and arbitraged away" as part of explaining why NNs would end up with convoluted opaque strategies, but only thought about "and existing NNs operating on the Market probably do the same for NN-level strategies" without actually writing it.
By the way, my post isn't meant to support people making NNs to trade, it's just a bit of blue sky thinking from somebody with some expertise in both worlds and barely begins to dig into the problems of it, thus not covering things - such as you pointed out - like how safe and reliable market strategies (human-powered or NN-powered) sooner or later get arbitraged away.