As I want to start coding a new Trading AI in this year (first based on Python and later maybe in C++) I stumbled over the following question:

Today, I would like to make a pro/contra list with you in the area of deep learning vs machine learning. The difference should be clear to most of you. If not, here is a nice explanation from Hackernoon.

Up to now I was convinced that this future project will be based on Tensorflow, Keras, etc. However, the following came to my mind afterward.

Most of you will probably have heard of Pluribus already. Dr. Sandholm and Mr. Brown (as work for his Ph.D.) were the first to program an AI that won against 6 poker world champions in No-Limit-Texas Holdem Poker. This seemed impossible because poker is a game of imperfect information. If you haven't read/seen their work until now, here's a link to a Facebook blog post Facebook, Carnegie Mellon build first AI that beats pros in 6-player poker. See also the paper Superhuman AI for multiplayer poker and this video.

From the work, it is clear that they wrote the whole thing in C++ and WITHOUT the use of any deep learning library but exclusively on the basis of machine learning. This was also confirmed to me by both of them via email. So it was possible to bring the AI in under 24H to a level that could beat 6 Poker World Champions without any problems.

The stock and crypto market is nothing else. A game of imperfect information. The prices of a crypto coin or stock are influenced by an incredible number of factors. This includes of course prices from the past but also current media (as currently seen with covid-19) and data from the economy.

We want to grab the Data out of the "Big Players" like CoinCap API, CryptoAPI.io for all kinds of historical and new charts prices etc. The same we will do with the Yahoo Finance API to grab data out of the stock market. Depending on the size of this project and how it will develop we want to implement also some kind of NLP to grab the most out of Economy Data like dailyfx news to predict some in/decreases for some stocks but this is a future feature. So basically the main question is what would be better for our system to be used. CNNs or machine learning.

All this leads me to the conclusion that I am not sure what the better option for a trading bot would be. I know that the training of AI-based on deep learning would take much longer than based on machine learning but is it safe to say that the results are really better?

What are the pros and cons of deep learning and machine learning to develop a trading system?

  • $\begingroup$ Hi Nils and welcome to AI SE! Can you describe more in detail your problem? What do you want to achieve exactly? Saying that you want to develop a "Trading AI" doesn't clarify much. Also, provide info about your available data, etc. Are you going to incrementally and online training your AI system? Please, edit your post to answer these questions. $\endgroup$ – nbro Mar 28 '20 at 17:09
  • $\begingroup$ @nbro Thank you so much for the better clarification in terms of Title and inputting the Links into the text. I will edit this today to make it a little bit more clear. Great work thanks for your nice word and welcome greetings! $\endgroup$ – Nils Schulz Mar 28 '20 at 18:49
  • $\begingroup$ @nbro I edited the Post and made it a little bit clearer in the case of Data which has to be used. Could you take a look if this is better? $\endgroup$ – Nils Schulz Mar 28 '20 at 19:02

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