After the Securities and Exchange Commission approved electronic communications networks (ECNs) in 1998, obtaining cutting-edge technology for stock trading accelerated. Traders could participate in stock exchanges and trade securities directly via these digital marketplaces. Since then, the industry’s top money managers, investors, and traders have been looking for cutting-edge resources.
Alpesh Patel Special Edition in Stock Market
Around twenty years ago, Alpesh Patel, the CEO of Praefinium, a private equity firm, embraced this trend. In 2004, he crafted an exclusive algorithm for assessing and selecting stocks. Dubbed the Alpesh Patel Special Edition, this tool achieved remarkable returns of up to 1,214% from its inception until 2021. In comparison, the FTSE All-Share index, used as a benchmark, recorded a 92% increase over the same timeframe.
Presently, AI is introducing a new layer of technological advancement. This provides investors and traders with a fresh set of tools. Alpesh Patel is also embracing this wave, actively exploring ways to leverage ChatGPT’s LLM to enhance the process of stock selection and optimization.
Alpesh Patel Experiments
In a interview conducted by Insider, Alpesh Patel shared insights from two preliminary tests he conducted using GPT-4’s Large Language Model (LLM). The first test, a walk-forward examination, tasked the LLM with selecting five potentially promising stocks for 2022. The second test was a real-time evaluation in which the LLM was asked to recommend stocks that it believed will do well over the next 12 months.
To achieve this, Patel provided the LLM with terminal data and instructed it to refine its results by filtering through esteemed academic literatures.
The main findings from these early trials emphasize two important skills of GPT-4: it may either confirm previous research efforts or offer insightful information that would have been missed depending on the input data. Patel also emphasized the significance of developing precise prompts, which was noted as one of the process’s most critical steps.
The featured image is from prnews.com
