Automation Versus AI
By Dave Mabe
[Note: I have a backlog of excellent reader questions that I'm working through. If you've asked one and I haven't responded yet, please be patient.]
Here's a good question from Jenny M. on automation and AI (name used with permission):
Jenny M:
Automating my trades is very interesting to me. What's your view on automation vs AI?
Dave:
It might sound strange to some traders, but I view automation and AI as very different.
The most overrated concept in AI right now is "agentic AI" - that is, having LLMs do something automatically on your behalf.
Has anyone trusted an AI agent to book travel for them end-to-end? No.
If you can't trust it for booking travel, then there's no way it's going to reliably answer a question like "what's the best way I should trade AAPL right now?"
I would argue even super-intelligence isn't going to help much with that question.
Pontificate all you want about how AI is going to do this or that for you in the future, but the better question is, how can it increase your P&L right now?
Think about your process for creating trading strategies.
What are the biggest bottlenecks? Be specific.
Now ask an LLM how to solve this very specific problem you've identified in your process.
Maybe something related to automating your trades.
Maybe it can tutor you in learning a new framework that will ultimately make your process faster.
The more detailed the context you can provide, the better answers you'll get from an LLM.
Do this regularly, and your P&L will follow.
Great question, Jenny, and thanks for sharing with the group!
-Dave
Wish you could backtest your ideas - without spending months learning to code?
Run your first backtest in an afternoon using my Amibroker AFL Course.