What is the biggest risk with AI-generated trading bots?
What is the biggest risk with AI-generated trading bots?
Bad logic, poor risk management, overfitting, or users not understanding the code?
If your prompt is a blank slate, AI generates useless boilerplate/generic trading logic, e.g., an SMA(10), and SMA(20), and the rest is left to your "discretion."
AI can't analyze tick nor OHLC data, so good luck getting meaningful stoploss/risk parameters from AI.
Overfitting is a byproduct of machine learning or optimization. In the case of machine learning, you presumably asked AI for some form of it. In the case of optimization, AI can't backtest on tick nor OHLC data so it's all on you in your backtesting. In either case, the GIGO principle applies─garbage in, garbage out.
There are AI engines that generate detailed code comments which should, at least, help you understand the code.
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What is the biggest risk with AI-generated trading bots?
Bad logic, poor risk management, overfitting, or users not understanding the code?