As computing power has evolved algorithms have improved to try to forecast market direction. We are trend followers, and look for trends based on momentum of price moves and patter recognition.
'AI' or neural networks as a subset have existed for a long time and not all processes are as good. Often times by learning from the rules of the game, they've so often 'curve fitted' so only worked historically. Trading as a game is not like chess, where you can tell a machine the rules and it works out the optimal moves. The other way chess machines learn, by experimenting, and seeing outcomes and probabilities, is more like trading. And this is the type of 'AI' learning we prefer.
Pure pattern recognition alone is not enough either for an edge in trading. We need more than a 50-50 coin toss edge of a move to have a good trade worth taking. Pattern recognition alone, does not give that. The old days of Japanese Candlesticks, wedges, flags, pennants, work. Yes, they all work. Just not often enough. A little like playing the lottery, you win small prizes often enough to keep going. But nothing that would justify leaving the day job or even a net positive return over the long term to make a business out of it.
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