Can AI replace human trading?

Recently, OpenAI launched the latest version of GPT.

This time, it showcased a comprehensive system that integrates visual, auditory, and other capabilities, and it also possesses the ability to express emotions. This makes GPT increasingly resemble a real person and capable of becoming our companion—Khan Academy's founder demonstrated a video of GPT tutoring children in math.

The effect is far superior to that of humans.

All of this increasingly makes people feel the power of AI and strengthens the belief that more professions will be replaced by AI. For example, many people say that AI can completely replace traders in trading.

In my early years, I also engaged in trading for a while, so I have a certain understanding of the processes and ideas involved.

Specifically, when trading cryptocurrency or other financial assets, we generally operate according to the following method:

Step 1: Gather all data related to trading, such as trading volume, trading price, trading time, etc.;

Step 2: Use existing models to calculate various technical indicators based on the data obtained in Step 1;

Step 3: Make a comprehensive judgment on the next trend based on various technical indicators.

At first glance, it seems that in these steps, Step 2 and Step 3 will be the potential focal points for artificial intelligence.

In the future, artificial intelligence is likely to create new technical indicators more efficiently and quickly based on historical data, thus rapidly iterating in Step 2 and surpassing competitors.

Similarly, future artificial intelligence will also be able to iterate evaluation systems more efficiently and quickly using the new indicators created in Step 2, thereby predicting the next trend more accurately and surpassing competitors.

However, upon further reflection, how to construct technical indicators in Step 2 and how to construct evaluation systems in Step 3 are still created by the human brain. Will future humans be able to break out of existing frameworks and construct technical indicators and evaluation systems with new rules?

If so, human creativity and imagination will be key.

If not, then to win in such competition, the most straightforward approach might be to leverage AI models, computing power, and data. But none of these three elements are advantageous for retail investors. Therefore, this trading method is likely to be monopolized by institutional traders, and retail investors participating in this arena are likely to be "cannon fodder."

Even so, does that mean retail investors have no chance at all?

Of course not. Retail investors can completely carve out a new battlefield, avoiding this disadvantage, and not compete with AI in short-term trading, but instead engage in value investing based on fundamentals, capturing the long-term trends of assets while ignoring short-term price fluctuations.

Today, I share my views on AI and trading purely from personal reflection.

In this new era where AI is rapidly emerging, we as humans should increasingly reflect on ourselves and re-understand ourselves.

I do not believe that the arrival of AI will threaten humanity; rather, it will threaten those low-tech, highly repetitive jobs that lack creativity.

For jobs that require creativity, AI is not easily replaceable. Additionally, humans can open up new battlefields, new fields, and new opportunities. And what is most needed for these is creativity.

Creativity is the fundamental driving force that distinguishes humans from all other beings and drives the continuous progress of human society.

Those who fully unleash their creativity in the future will not only not be replaced but will also create more value and gain more wealth.

To unleash our creativity, we must cultivate independent thinking, establish our own independent thinking systems, and construct our own independent analytical frameworks, actively exploring problems and questioning answers.

Otherwise, in the age of AI, we are more likely to become slaves, more easily exploited. AI can deceive us more efficiently, covertly, and subtly than our peers—Mr. Buffett even mentioned at the shareholders' meeting that he thought of fraud when it comes to AI.

AI is not to be feared; what is frightening is our own loss of creativity and independent thought.