IT’S NOT MAN VS MACHINE: IT’S MAN+MACHINE!

Written By Ivo Luhse

If you think that machines alone (trading robots) will make you rich we have to stop you right there. Unlike the majority of trading software vendors that promise you “set-and-forget” autonomous easy money, our software is not meant to replace human traders. And we don’t recommend that you blindly follow any trading robot. Our software is designed to support human traders. It’s called Decision-Aiding-Robo-Advisor or DARA for a reason.

At DARA we’re big fans of humans 😁

Humans are awesome. 

  • We can make decisions with a little amount of data (unlike machines which need lot of data to make good decisions) 

  • We can do a lot of different things reasonably well (Drive a car, write a novel, cook a meal, etc). Machines are typically good at one thing only. 

  • We know what is important (machines don’t know what is important unless we specify this to them)

Mathematician Anton Holt said it best:

“Artificial Intelligence is a good description of any intellect that can make a brilliant chess move while the room it’s in fills with smoke as the house is burning down!”

Humans and Machines have fundamentally different strengths and weaknesses. This is the reason the best trading results can be achieved when using both together.

Human strengths 

  • Amazing ideas

  • General intelligence: we know a lot of stuff and can do many different things equally well

  • Can make decisions from little data, by using heuristics and common sense 

  • Learns quickly 

  • Deals with unexpected events 

  • Quickly adapts to changes 

  • Knows what is important

  • Has goals (personal importances) 

  • Is self-aware (knows what one likes and doesn't like) 

Human Weaknesses 

  • Emotional

  • Has biases 

  • Gets tired quickly 

  • Is computationally slow

  • Makes mistakes

  • Sees what he wants to see 

  • Is influenced by others

Machine Strengths 

  • Speed

  • Precision

  • Consistency 

  • Persistence 

  • Never sleeps or gets tired

  • Can analyse huge amounts of data

  • Multitasking and parallel tasks 

  • Can easily be connected to other algorithms 

  • Is objective  

Machine Weaknesses

  • Can’t adapt to changes quickly enough (Rigid) 

  • Needs large amounts of data to make good decisions

  • Can’t solve problems outside their inputs (narrow intelligence) 

  • Can’t deal with unexpected events 

  • Can’t operate correctly without all the data (has no common sense) 

  • Can’t operate correctly without all the systems working (cannot improvise)  

  • Has no goals

  • Has no idea what is important 

  • Has no idea what is important to you (unless you specify this) 

A beautiful thing happens when you join the two together 

Human + Machine strengths 

  • Can test amazing ideas in objective settings 

  • Can increase general knowledge with the help of the information provided by machines 

  • Can make decisions with little amount of data (apply common sense) 

  • Can learn super fast with the constant information delivered by the machines 

  • Can deal with unexpected events 

  • Can adapt to changes quickly and objectively 

  • Knows what is important

  • Has goals (personal importances) 

  • Is objective and personal (knows what one likes and doesn't like) 

  • Is fast

  • Is precise 

  • Can set machines to work 24/7

  • Can analyse huge amounts of data 24/7

  • Can do multitasking and parallel tasks 

  • Can easily be joined together with other knowledge outside machines inputs

Human + Machine Weaknesses 

  • Need a human that can think objectively and use the data machines provide.

  • Is not “set-and-forget”, continuous management and supervision of machines is required. 

Ivo Luhse
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