ARTIFICIAL INTELLIGENCE: YOURS, MINE or THEIRS?
As I understand it, A.I. is a broad term for technology that mimics human decision-making (or problem-solving) by taking everything that is already in the literature, analyzing it, and then projecting answers from that pool of knowledge.
As a matter of fact, you and I do the same thing but with limitations. Our pool of knowledge is based on what we already know, have studied, and/or experienced. And (as has been my experience) there is a lot more outside my pool of knowledge than there is inside!
In our e-mail, we frequently find all manner of trading sights wanting us to pay for their new A.I. designed services, which they say are geared to help us make better trading decisions.
Are these sights worth the expense?
They can certainly evaluate the historical parameters of a stock (ETF) and make price predictions into the future based on past history but they can’t tell what the price will be in five minutes, tomorrow, the next day, or anytime into the future.
Therein, to my thinking, lies the downside of AI. You, me and AI can only see the past, the present, but not the future.
The stock market itself only gives current price and calls it ATM (at-the-money). Furthermore, the market labels current price as a 50 Delta giving a 50/50 chance of going up, going down, or chopping sideways. An ATR (Average True Range) can look back and give an expected price range based on the past X number of days (I use nine days look back).
Why do I use nine days? It has been shown that candlesticks (price) historically move 6–10 bars average (in all time frames) before changing direction.
So, why don’t we just rely on history for making trading decisions?
Why do I use indicators, oscillators, and/or other parameters for making current trading decisions? Shouldn’t A.I. be enough?
If the market itself doesn’t know the next move, then a small player like me might need to look at some other current facts and tendencies, before making a decision to place a trade?
What is my chosen oscillator telling me? I see it only showing footsteps up to this point. There are no footprints in the sand ahead. It has no foreknowledge for its next step. It only hints as to direction. An oscillator is limited to showing past movement up, down, or chopping sideways. It will show its footsteps in color, which is very helpful as to strength of the footstep.
Possibly I need other indications for what the next move might be?
Some of my questions might be:
Is there momentum taking place in the current direction? What is the overall market doing? What was the opening range for this stock (ETF)? Is it trading within that range, or has it broken out above or below that range? Does it seem to be down at support, or is it up at a possible resistance level? What is its ATR (average true range)? Is it trading within 1SD (one standard deviation) which it normally does around 80% of the time? Are there other parameters that I should take into consideration?
What I need is something visual to help me see what’s happening! My motto is: If you can’t see it, why trade it?
A.I. is helpful, but it’s a blank for the next step to take?
Projections are nice, but I need to see the now?
I need indicators that show current status with possible changes in direction that might happen.
I think I’ll go look at some of Charles’ AGAIG charts and see if they give a better clue to the answer for some of my questions? I need something more in addition to Artificial Intelligence.
This may be a 50/50 game, but I need to find an edge!
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