Active currency traders discuss with the buzzworthy person in a Trader’s dialogue｜Guest Naoto Okumura Part II [Traders Securities Minna no FX Inoue Kiwo]
Naomura Okumura Profile
Developed numerous mathematical models at Nikko Securities. Worked with Stanford University professor Dr. William Sharpe (Nobel Prize in Economic Sciences, 1990) on investment model development, helped establish ventures with Israeli Mossad science advisors, and has a track record at the intersection of finance and IT. Hosts a financial literacy workshop to raise Japan’s financial literacy.
Official site:https://okumura-toushi.com/
Kio Iguchi Profile
Iguchi Yoshio. Trader Securities Market Department, Dealing Section. Certified Technical Analyst. Since 1998, engaged in financial institutions, mainly involved in covering dealing in commodities markets centered on precious metals and petroleum products. Since 2009, affiliated with Minna no FX, conducting dealing focused on USD/JPY and major European currencies. Proficient inForex analysis from fundamentals and well-regarded for short-term forecasts using technicals. Recently appeared in Minna no FX’s free online seminars, with easy-to-understand lecture content. Also on Twitter, professional dealers share real-time market opinions, so worth checking.
Twitter:https://twitter.com/yoshi_igu
※This article is a reprint/edit of FX Tactics.com September 2020 issue. The market information written in the text may differ from current market conditions, so please be careful.
【Part 1 is here】
Current AI is still developing. Looking forward to future evolution
IguchiI’d like to ask Dr. Okumura, who is an AI expert, but recently there are many automated trading and investment funds claiming to use AI, and many investors have the image that AI makes it easy to win. What are your thoughts on this?
OkumuraWhen people think of AI, there’s often a misunderstanding that it will surpass humans, but it will not. So using AI to beat humans won’t suddenly make you win. I wouldn’t say you can never win, but at present AI’s capability is to perform what humans can do, in the most efficient way.
In investing, what AI is matters. For example, if you’re in a financial institution and say, “We use AI for our operations,” and you ask “What functions does the AI you use have?” I think no one can answer accurately, because those people are salespeople, not researchers.
On the other hand, when you insert money into a vending machine, a drink comes out; that is also a form of AI. It detects counterfeit money, remembers who buys what by looking at the purchaser’s face, sends data back to the head office, and predicts stock for beverages to prevent shortages. Also, ticket gates at stations count commuters accurately, which is also AI. Yet we don’t call vending machines or automatic gates AI, do we?
The current AI in the financial industry is far from the level we expect. For example, there are services that answer questions like “Do you want to become rich?” and immediately propose a portfolio suited for you, which is closer to fortune-telling. That’s the level of present AI. When true AI appears, it will be better. As of now, I think there are almost no major Japanese securities firms using AI. What can win in the market is not AI, but trading methods that use machines to grab a small spread faster than others. Many institutional investors and large funds are currently engaged in flash trades using machines.
