The more AI evolves, the further it drifts from the truth of trading

Evolution of AI and trading skills: why formal knowledge is strong but tacit knowledge is lost

With the evolution of AI, the trading world has made formal knowledge (explicitly conveyed knowledge) easily accessible. However, in mastering trading techniques, there is a phenomenon of moving away from traditional know-how and tacit knowledge (knowledge based on experience and intuition). There are several rational reasons behind this phenomenon.

1. Fundamental difference between formal knowledge and tacit knowledge

- **Formal knowledge**: Trading strategies, methods of analyzing economic indicators, statistical approaches, etc., knowledge that can be learned from books or online courses.

- **Tacit knowledge**: Ability to read subtle market movements and trader psychology, intuitive judgments gained from experience.

Tacit knowledge cannot be learned through direct experience or interaction with the market, so it cannot be transmitted as easily as the formal knowledge provided by AI.

2. Difference between learning and experience

AI excels at recognizing patterns from vast market data and automating trading strategies. However, successful traders possess the ability to perceive fine market nuances and human emotions from experience. These are elements that cannot be fully captured by data alone.