In some ways, there’s no better proof positive of the power of artificial intelligence than seeing an AI entity win at stock trading.
After all, money talks – we know that, and it’s a very ingrained idea in our societies. You can talk about the printing press and decision-making machines, and the discovery of LLM capabilities all you want, but when a robot makes bank on the market, people pay attention.
To wit, Jeanne P. Frahm at FinZen News reports this morning on the amazing display of the Galileo FX trading robot making some 500% on a $3200 investment – in a week.
Noting metrics like a 72% win rate and a 3.2 profit factor, Frahm adds context, including another test where the bot generated returns of 560% over five months.
Now, for reference, the conventional wisdom as is stands is that a skilled human trader could make 5-10% a year and beat inflation, as well as the S&P 500 index.
It now seems that, armed with its own innate power to forecast and predict outcomes in complex systems, Galileo FX has a lot more power and accuracy than that.
“With over 250 pre-analyzed strategies updated weekly, Galileo FX simplifies trading for beginners while providing the flexibility experts need,” Frahm writes. “These strategies can be easily and quickly integrated into the AI bot, enabling it to trade using the same settings that generated the winning results. Once selected, the AI bot takes over, executing precisely as intended. Users can filter strategies by criteria such as date, mode (aggressive, conservative, moderate), trading style (day trading, swing trading, long-term investing), timeframe (M1 to W1), and market (forex, crypto, stocks, etc.). Each strategy includes a detailed breakdown of trades, charts and advanced statistics, with labels to facilitate the selection of the most suitable options.”
Up the Down Staircase
Another major point that Materazzi makes in his own columns is also echoed in news coverage of his company. It’s the idea that traders should accept that losses are a part of the game.
Maintaining that many competing traders like to inflate news of their own winnings, Materazzi is pursuing a time-tested form of truth-telling on the markets.
It’s long been observed that some of the better traders can benefit from moving in the opposite direction of the herd, that sometimes fairly single-minded community of traders who are chasing quick profits.
As a younger correspondent on stock markets, a friend of mine routinely used that term, “up the down staircase,” to describe this trading philosophy. He quoted Warren Buffett, who routinely pursued “fire sales” of beleaguered stocks. And he cited Burton Malkiel’s “random walk on Wall Street” to point out the fickleness of the market, and what kinds of market dynamics can often propel success.
These, as Materazzi suggests in his column, are the long plays, the buy and hold strategies, the techniques based on a longer time horizon, and not on chasing quick profits.
“Get-rich-quick trading schemes are a fantasy,” Materazzi writes. “I’ve met many successful traders over the years—both while working at a hedge fund that managed billions of dollars in daily transactions and after launching my own trading software company—and none of them has claimed to have the secret to overnight wealth. The truth is that trading is hard and often boring. It requires time, ongoing effort and patience. In my work, I track many trends that are shaping the financial landscape for independent traders. And while innovation drives our industry forward, some developments have the potential to steer investors off course.”
Or take a look at one of Materazzi’s comments as a quote in recent news coverage of the company:
“There’s no place for sugarcoating in the trading industry. Losses are a certainty, not a probability. At Galileo FX, we are firm believers in confronting these hard truths and preparing traders for the inevitable downturns rather than serving them pipe dreams of seamless profits.”
This kind of judgment underpins the success of some pretty notable traders, and it’s something to take seriously.
AI and Analytical Success
However, in a technical sense, Quick profits are the name of the game. The success of a trading strategy is shown in its financial outcomes. And Galileo effects has stunned those who have a pretty nuance to understanding of how these outcomes usually manifest. In other words, maybe using the acumen of AI, humans can make quick profits…?
“(Galileo FX) offers three significant advantages for traders: high profitability, full automation, and user-friendly customization options,” wrote one user, David H Burnett, last February in reviewing the technology. “I was surprised to realize Galileo FX provided a number of ready-to-use presets and settings free of any additional charges, plus premium presets. I highly recommend this trading robot to anyone considering automated robotic trading. One of my best investments.”
In some ways, it’s just another example of how networks and the product of LLMs can be more highly analytical and technically accurate than the products of a human mind, or a set of human minds. In another way, though, it’s unique in ushering in this brand-new year of AI, where we just don’t know what’s going to happen.
I saw Yuval Noah Harari recently on Stephen Colbert, where he suggested that this is the first time in human history where we can’t envision the world in 20 years, and don’t know what to teach our young students in order to foster success a couple of decades from now.
2045 may be a pretty unfamiliar-looking landscape, with all kinds of changes that will flummox mature adults, and things that we suppose would make the recently departed roll over in their graves.
Not to be morbid.
Another way to view it, though is that we have this unbounded sense of promise and potential of exploration into a New World That is unlike the one we’re leaving behind. There’s this sense that we don’t need to go to the moon or to Mars to become explorers like astronauts. We just need to wait a while, and see what our own world looks like.
